VW believes it is now on the road to further profit growth

Overall net profits at the firm jumped to 2.75bn euros ($3.6bn; �1.8bn) in 2006 from 1.12bn euros a year earlier.

The company thanked windfall gains from unit disposals, rising sales and the positive impact of German corporate taxes for the increase.

VW recently embarked on a restructuring drive to tackle falling profits, rising competition and increasing costs.

Once the cost of the shake-up - which led to at least 20,000 job losses - are included, operating profits fell to 2bn euros against 2.9bn euros in 2005.

The 1.26bn euro sale of VW's Europcar car rental firm also added to profits, as did an 11% rise in sales to 104.9bn euros - buoyed by strong demand for new models such as the Audi Q7 offroader.

'Drive forward'

Operating profits before one-offs rose to 4.38bn euros ($5.75bn; �2.9bn) from 2.9bn euros in 2005.

Looking ahead, the firm said it would continue to drive through change, adding it was on course to achieve earnings of 5.1bn euros next year.

"We will continue to vigorously drive forward the activities to improve cost structures and processes in 2007," said VW.