The Volkswagen booth at the North American International Auto Show in Detroit, Michigan January 10, 2011.
Volkswagen, Europe's largest car maker, tore through quarterly earnings forecasts with emerging markets fuelling a sharp rise in sales and taking it closer to its goal of overtaking Toyota.
Car makers have turned to booming markets such as Brazil, Russia and China - now the world's largest auto market - for growth as European markets stagnate.
VW, whose stable of brands includes Audi, Skoda and Seat, sold 14 per cent more vehicles in the first quarter of the year, thanks to demand from abroad and a low exposure to supply-chain problems related to the crisis in Japan.
"We continue to see the most dynamic growth prospects in the emerging markets of Asia and Latin America, whereas the industrialized nations will continue to experience only moderate growth," Volkswagen said on Wednesday.
Bernstein Research said VW's strong performance was part of a wider trend of demand for German marques.
"The world wants to buy German vehicles, and BMW, Mercedes and VW are taking market share everywhere," Bernstein analysts said in a note on Wednesday.
The country's car exports jumped by 24 per cent in 2010, but German car makers are already producing more vehicles abroad than in their home market to meet demand from countries such as the United States and China.
Shares in Volkswagen, which has a 12-per-cent share of the global passenger car market, extended gains to trade higher.
VW's operating profit, which does not include earnings from its lucrative China business, surged to €2.91-billion ($4.08-billion), surpassing the €2.19-billion estimated on average from a Reuters poll of 11 analysts.
Some European car makers such as PSA Peugeot Citroën have taken a hit after Japan's earthquake, tsunami and nuclear crisis made it difficult to source car parts from there.
Rival Renault on Tuesday predicted that the impact of the Japan crisis on the auto industry supply chain could lead to slower production in the coming months.
But German auto companies have so far remained relatively unscathed by supply chain problems, and the crisis may create an opportunity for Volkswagen to surpass its top rivals.
VW has been aiming to surpass Toyota , the world's biggest car maker, in terms of global auto sales, and the Japan crisis could hamper Toyota's production, pushing it temporarily to the No. 3 spot behind General Motors and VW.
VW warned that the crisis in Japan and its economic impact could adversely affect car production and sales but said it still expected to post higher 2011 revenue and operating profit and to top the record 7.14 million vehicles it sold last year.
"The outlook is not aggressive, but that is understandable in the face of uncertainties such as the crisis in Japan, the European debt crisis and an uncertain development of raw material prices," said Michael Muders, a fund manager at Union Investment, 10th biggest holder of Volkswagen preference shares.
Volkswagen's chief financial officer Hans Dieter Poetsch told analysts during a conference call that the company should be able to get all the parts it needs for the next few weeks, though he could not rule out problems later in the year.
Porsche AG, the sports car business jointly owned by Porsche SE and VW, earlier said it more than doubled its operating profit to €496-million in the first quarter, with a 10-per-cent increase in revenue.