According to figures for the first six months of the year, released by the companies in the past few days, VW increased global sales 7.2% to 3.31 million cars and trucks, while Ford sales fell 11% to 3.09 million.
Ford was the world number two until five years ago when it was overtaken by Toyota. Now it has dropped into fourth place as sales in the US have plummeted 14% as fuel prices have risen above £2 a gallon, hitting demand for its large pickup trucks and SUVs.
Ford can no longer count Jaguar and Land Rover in its sales figures having sold the British brands to Indian manufacturer Tata Motors last March.
Company boss Alan Mulally says Ford will put more emphasis on fuel-efficient small cars in the future leaning on models produced in Europe.
Meanwhile VW has seen sales grow in emerging markets such as China, India, Brazil, Russia and Ukraine.
Toyota has since moved into the number one spot and sold 4.82 million vehicles in the first half of 2008 according to preliminary figures, while GM reported sales of 4.54 million.