As General Motors Corp. and Toyota Motor Corp. battled for the No. 1 sales ranking in recent years, Europe's biggest carmaker Volkswagen AG seemed mired in a set of distinctly European problems.
It was saddled with a large, highly paid work force and a German state as its leading shareholder. Senior executives became tabloid fodder in 2005 during a sex and bribery investigation, and the chairman squandered money developing expensive vehicles far removed from Volkswagen's original mission to be the "People's Car" maker.
But in the global auto industry, winners can turn into losers overnight, while laggards can suddenly exhibit surprising vigor. Volkswagen, long dismissed by investors, looks quite fit in this downturn. While most of its rivals are losing money, the Wolfsburg, Germany-based manufacturer earned $1.7 billion in the first half of the year on its car-making operations and a net profit of $700 million.
Propelled by its leading position in Europe and strong presence in China and other emerging markets, Volkswagen is on track to become the world's second-largest automaker, behind only Toyota, possibly as early as this year, according to forecaster CSM Worldwide in Northville.
2009 Frankfurt Auto Show Photo Gallery
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