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Emblems of VW Golf VII car are pictured in a production line at the plant of German carmaker Volkswagen in Wolfsburg
Reuters/Fabian Bimmer
Racing ahead.
WHAT SCANDAL?

Volkswagen finally achieved its dream of ousting Toyota as the world’s biggest carmaker

By Jill Petzinger

Volkswagen has managed to wrestle the title of world’s biggest carmaker away from rival Toyota, despite being tarnished by the worst scandal in its history.

The German group ended Toyota’s four-year reign at the top with 10.3 million cars sold in 2016, versus Toyota’s 10.2 million. Volkswagen pulled head of Toyota in the first half of 2015, but was laid low in the second half when it was busted for emissions-cheating software installed in millions of cars around the world.

VW powered past Toyota last year with a 3.8% jump in sales from the previous year—Toyota reported a mere 0.2% annual increase—largely thanks to rising demand in China, where the German group has been unaffected by the emissions-cheating scandal since it sells hardly any diesels there. VW’s sales were up more than 12% in China, to 4 million units, outpacing 4% growth in Europe and a 2% fall in the US, where the cases of emissions-test cheating first came to light.

Taking the top spot from Toyota was an obsession of long-serving VW CEO Martin Winterkorn, who was forced to resign in 2015 as the emissions scandal came to light. Under his strategy, executives were pressured to pursue volume growth at all costs. The company met Winterkorn’s target of selling 10 million vehicles a year four years early, but like Toyota and GM before it, the company ended up cutting corners to deliver on the boss’s ambition.

Having risen to the top, it appears the German carmaker won’t necessarily fight to stay there: “Our new strategy through 2025 doesn’t include any sales targets any more,” said Dietmar Voggenreiter, sales chief at VW-owned Audi, earlier this month.

Even so, Volkswagen’s time at the top may be extended thanks to Donald Trump. Toyota was already singled out for a Twitter-scolding by president Trump earlier this month over its plans to build a new plant in Mexico. Although Trump also threatened German carmakers with a 35% tariff on vehicles imported into the US, it isn’t a big market for Volkswagen, even before its brand was tarnished by scandal. Last year, VW sold just over 590,000 cars in the US, versus nearly 2.5 million for Toyota.