VW, whose brands include Volkswagen, Audi, SEAT and Skoda, said in a statement it booked net profit of €15.799 billion ($21.2 billion) in 2011, up from €7.266 billion in 2010.
After payments to minority shareholders, the bottom-line profit stood at €15.4 billion, compared with €6.835 billion a year earlier, the auto giant said.
Operating profit raced ahead by 57.8 percent to €11.271 billion.
"The Volkswagen group again generated record profit in the fiscal year," the car manufacturer announced.
Deliveries to customers topped the eight-million mark for the first time, rising by 14.7 percent to 8.265 million vehicles and revenues rose by 25.6 percent to €159.34 billion.
In comparison with other automotive giants, that places VW ahead of Japan's Toyota in terms of unit sales last year, but still behind US giant General Motors, the world's biggest car maker.
VW hopes to overtake GM to fill the number one position by 2018.
In the wake of its strong performance, VW said it would pay an increased dividend of €3.00 per ordinary share and €3.06 per preference share for 2011, compared with the 2010 payout of €2.20 and €2.26 respectively.
Investors appeared unimpressed and VW shareholders were up by a modest 0.36 percent at €139.65 on the Frankfurt stock exchange, underperforming the overall market.
The figures are only preliminary and full 2011 earnings will be released at VW's annual news conference on March 12.