For the first time, VW led the rankings established by the German Centre for Automotive Management (CAM), a highly-regarded institute located in the western town of Bergisch Gladbach.
The study was published in the daily Die Welt and showed VW ahead of German rival Daimler, Hyundai of South Korea, and another German company, BMW.
Toyota was number one in 2009, but was hit last year by repeated quality problems, and only placed eighth this time around, just ahead of the Japanese group Nissan and General Motors, in process of coming back from bankruptcy.
The classification takes into account each group's financial results, market share and capacity for innovation.
In the last category, "Volkswagen recorded the biggest gulf with other auto manufacturers," according to CAM director Stefan Bratzel.
With a total of nine brands, including Audi and Skoda, the VW group offers a wide range of vehicles, and it is very well positioned in the world's biggest auto market, China.
The German automobile giant hopes to become the world's biggest carmaker by 2018.