Volkswagen has reported profits that jumped to 3.2 billion euros in the fourth quarter of 2010 and said it wants to unseat Toyota and become the world’s largest carmaker.

Already number one in Europe, VW is looking to expand through growth in emerging markets – like China, Brazil, Russia and India – along with acquisitions.

Its net income last year was 6.8 billion euros and Volkswagen CEO Martin Winterkorn said: “The car industry got back on track last year and enjoyed a brilliant comeback. Our company proved how robust it was during the crisis and we also led the field during the recovery.”

Winterkorn said the group wants to be selling 10 million vehicle annually by 2018.

He also confirmed plans to press ahead and merge with Porsche despite major tax and legal obstacles. The sports car maker may face court cases from its failed attempt to take over VW in 2008.

That left it with six billion euros in debt and new capital must be raised to clear that before a merger could go ahead.

Combining the two firms would save millions annually from economies of scale and VW would get Porsche’s fat profits.