NEW YORK ( TheStreet) -- Volkswagen AG shares have been on a tear, propelled by a falling euro against the dollar, and a hypothesis among investors that weak currency in Germany is bound to spur exports and increase the value of dollar-denominated profit.

The automaker this week expressed a note of caution about this assumption. Speaking at the company's yearly financial review in Berlin on Thursday, chief financial officer Hans Dieter Potsch noted that with nearly 130 factories around the world and multiple hedging strategies, the effect of a single weak currency are minimal. Indeed, currency fluctuations were a drag on 2014 earnings.

But VW remains outspokenly proud of its progress toward becoming the world's top automaker, a goal it hopes to reach by 2018 or before. The spot is now occupied by Toyota Motor Corp  (TM - Get Report).

"We have written an impressive, sustained success story," said Martin Winterkorn, chief executive officer. "The Volkswagen Group signifies real value and reliability in a world full of uncertainties." VW, he added, "is a rock."

On European exchanges, VW shares have risen 36% over the past six months. The ADRs have risen only 11%. Of the seven equity analysts that follow the stock, five rate it a "buy" or "strong buy."

The company set new records for revenue and profit in 2014. More significantly, it spent 11.5 billion euros on research and development in 2014, which it claims is more than any company.

The key strategy driving VW's growth in sales and profitability is the development of modular architectures upon which every one of its car models is based. VW Group has 12 brands, including VW, Audi, Porsche, Bentley, Lamborghini and others - and four or five car architectures will cover the entire model lineup.

By reducing the capital invested in a vehicle's basic structure, VW can spend more on premium materials and advanced features, such as digital infotainment and adaptive cruise control, which use sensors to prevent collision with a vehicle ahead. More features lead to higher prices and more profit, VW reckons.

A week ago the automaker announced a $1 billion investment in a new factory in Puebla, Mexico to build the new generation Tiguan compact crossover, to be sold in the U.S.

The first architecture to reflect the automaker's modular strategy is MQB, introduced in 2012. Roughly 40 pc of VW's cars, mainly in the VW, Audi, Skoda and SEAT brands, will be built on MQB. The letters denote a transverse engine mounting and front-wheel-drive.

Of the 10.2 million cars sold by VW globally in 2014, 2.7 million were on MQB; Winterkorn said that number will rise to 7 million four years from now. VW expects the efficiencies gained by building more cars under MQB will help to reach the goal of an operating return on sales to 8% or more from 6.3% last year.

A few years ago, Toyota discovered that the road to becoming the top auto manufacturer is challenging. In Toyota's case, the negative surprises included a tsunami in Japan and legal and public relations issues in the U.S. related to unintended acceleration of its cars.

Sales in the U.S. have been uncharacteristically weak. But the company has significant momentum in Europe, China and South America. Barring the unforeseen, the mountaintop could be within reach.






This article is commentary by an independent contributor. At the time of publication, the author held no positions in the stocks mentioned.