There are still details to be sorted out but the integrated Volkswagen - Porsche Automotive group will happen promised VW Group chairman Martin Winterkorn.
Negotiations have been ongoing for some time and last year VW acquired Porsche Holdings Salzburg for €3.3 billion.
Winterkorn said: "There are still hurdles to jump but the integrated automotive group will happen."
The will add further strength to an already impressive VW product portfolio.
Winterkorn added: "The new VW Up was a product highlight in 2011 and Audi is well on its way to the top of the premium segment. We will make a decision soon on a new factory in North America for the brand.
"Skoda recorded its ninth successive record year and is on track to growing to 1.5m vehicles a year by 2018, up from 879,000 last year, growth led by the launch of a new, high quality, low cost car in India."
Despite a very trying economic climate in its home market, Spanish affiliate Seat held its own with 350,000 sales, up 3.1 per cent.
Encouragingly the brand showed growth in the UK and Germany although its numbers are still held back by a "dramatic" decline in sales in Spain.
There are plans to boost Seat's presence in China with the launch of new models there.
Winterkorn added that Bentley continued to bounce back after suffering badly at the outset of the economic downturn.
The British luxury brand has returned to profit and deliveries rose 36.9% to 7,003 cars in 2011 while it recorded an operating profit of €8 million following a loss of €243m a year ago.