The VW group, which also includes the brands Audi, Porsche and Skoda, saw sales increase by 3.8 per cent on the year, pushing it back over the magical 10-million mark after slipping to 9.93 million last year.
The results come as the company's "dieselgate" crisis is back in the spotlight following the arrest this week of a VW executive in Miami who stands accused of helping to cover up the scandal.
The scandal harmed Volkswagen's reputation and sent its share price plunging, but customers appear to have largely shrugged off the controversy.
Volkswagen has responded to the crisis with a management shake-up and by shifting its focus to clean-energy vehicles, setting out to be the world's leader in electric cars by 2025.
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"2016 was a very challenging year for us. We made strides in resolving and overcoming the diesel crisis and at the same time initiated a fundamental change process," chief executive Matthias Mueller said in a statement.
In the United States, where customers have taken mass legal action to secure compensation from Volkswagen, sales were down 2.8 percent over the year.
Volkswagen's main rival Toyota has yet to announce its full-year sales figures, but it said last month that it expected to have delivered just over 10 million vehicles worldwide.