Volkswagen AG, Europe’s largest automaker, said third-quarter operating profit surged 46 percent on demand for Audi and VW brand sport-utility vehicles.

Operating profit advanced to 2.89 billion euros ($4.05 billion) from 1.99 billion euros a year earlier, the Wolfsburg, Germany-based company said today. Profit beat the 2.61 billion- euro average estimate of 15 analysts surveyed by Bloomberg. The shares rose the most in more than two years.

Chief Executive officer Martin Winterkorn is expanding in China and the U.S. in a bid to surpass Toyota Motor Corp. as the world’s biggest carmaker. The German manufacturer has a goal of boosting deliveries 11 percent this year to a record 8 million vehicles. VW stuck to a forecast that 2011 Ebit and revenue will be “significantly higher” than last year.

“VW’s business remains very solid,” said Frank Schwope, a NordLB analyst in Hanover, Germany, who recommends buying the stock. “They’re headed for a massive profit this year. The good performance should continue through the first half of 2012.”

Volkswagen rose as much as 12.15 euros, or 10.3 percent, to 130.35 euros, the most since Aug. 19, 2009, and was up 9.2 percent as of 2:23 p.m. in Frankfurt trading. The shares have gained 6.3 percent this year, valuing the German company at 55.6 billion euros.

VW and Audi have expanded SUV production in the past quarter to meet high demand. Audi suspended summer holidays at its main factory in Ingolstadt, Germany, to maintain output of the Q5 SUV and extended around-the-clock production of the Q7 model in Bratislava, Slovakia. VW added shifts to increase production of the Tiguan compact SUV.

Third-quarter net income more than tripled to 7.04 billion euros. Profit was impacted by a gain from the revaluation of an option linked to VW’s planned combination with Porsche SE. Revenue gained 25 percent to 38.5 billion euros.

“Our strong business performance shows the strength and stability of our strategy,” Winterkorn said in a statement. “In light of the current economic uncertainties, we are continuing to monitor developments in the global automotive markets extremely closely.”

Daimler AG, the world’s third-largest maker of luxury vehicles, today reported a decline in quarterly profit for the first time in two years on slowing sales growth and costs for new models. PSA Peugeot Citroen, Europe’s second-largest carmaker, yesterday cut its 2011 auto profit target and said it may eliminate as many as 3,500 jobs as pricing pressure rises.

VW’s partnership with Suzuki Motor Corp. has deadlocked in recent months, with the Japanese manufacturer urging VW to sell back its 19.9 percent stake. VW has dismissed Suzuki accusations that it violated a cooperation accord by not sharing technology, and repeatedly said it plans to keep the holding.

Volkswagen said today that it no longer classifies Suzuki as an “associate,” retracting wording that set off the downward spiral in the tie-up. VW enraged Suzuki by saying in its annual report in March that it could “significantly influence financial and operating policy decisions” at Suzuki.

“The opportunity to exert notable influence upon Suzuki is, for the time being, no longer available,” Volkswagen said today, adding that it now lists Suzuki under ”other holdings.”

VW won European Union antitrust approval last month to take a majority stake in MAN SE. VW has been seeking closer links between MAN and Scania AB, also controlled by VW, with a goal of saving as much as 1 billion euros in annual costs.

A planned merger with Porsche SE is being held up by lawsuits in the U.S. and Germany, and investigations over accusations Porsche misled investors during a failed attempt to buy VW. Porsche has repeatedly denied all of the allegations.

The maker of the Golf hatchback, VW’s best-selling vehicle, plans to invest a record 62.4 billion euros over the next five years on plants, models, research and development to underpin its global expansion. VW wants to hire more than 50,000 workers through 2018 as it targets more than 10 million autos per year.

VW’s nine-month deliveries rose 14 percent to 6.1 million units, powered by a 15 percent increase in China and a 20 percent gain in the U.S. Sales of the namesake brand’s models, such as the Golf and Polo subcompact, rose 12 percent to 3.8 million, while deliveries of Audi cars, including the revamped A6 and the Q5 SUV, increased 17 percent to 973,000 autos.

Audi’s nine-month operating profit surged 74 percent to 3.96 billion euros, accounting for almost half of VW group gains. Profit at VW’s namesake brand more than doubled to 3.3 billion euros while cost-cutting steps at Spanish division Seat helped shrink the loss by more than half to 101 million euros.

“We are on the right track with our strict cost and investment discipline and will systematically continue along this path,” Chief Financial Officer Hans Dieter Poetsch said. “We have established a strong position and our sound finances mean we are well prepared for the future, even if this entails economic uncertainties.”