The Durham-based family motor retailer will rebrand the site Pulman Volkswagen, Sunderland.
Its addition means that Pulman has more than 120 staff across the two sites.
Mike Pulman, Pulman managing director, said the expansion demonstrated its commitment to growing the Volkswagen brand.
“We are looking forward to building the same reputation in Sunderland as we have done in Durham,” he added.
In 2007, company profits almost doubled to £623,000.
Turnover increased by 48%, from £23 million in 2006 to £34 million in 2007.
Inchcape would not comment on the sale or the site’s profitability.
It is believed the motor retailer agreed the sale with Volkswagen because the dealership was outside Inchcape’s other VW location clusters.
Pulman Volkswagen also runs Pulman Fleet Contracts as a subsidiary.