UPDATE 1-Valeo Q2 sales plunge, slips to net loss

* H1 sales down 28.4 pct at 3.472 bln euros

* H1 net loss 213 mln euros vs 100 mln profit in H1 2008

* H1 negative operating margin of 51 mln euros

* Positive op margin of 15 mln euros in Q2

* H1 free cash flow 4 mln euros; 84 mln euros in Q2 (Adds details)

PARIS, July 28 (Reuters) - French car parts maker Valeo (VLOF.PA) on Wednesday posted lower sales and made a loss for the second-quarter but revised its forecast for worldwide car production upwards for the year as a whole.

Valeo said it saw worldwide car production down 17 percent in 2009 as a whole, and 7 percent in the second half. It had previously forecast a drop of 20 percent for the year as a whole, as crisis-hit carmakers slammed the brakes on production.

A rebound in automobile production will continue in the third quarter, "through the combined impact of incentive programmes for new vehicles in Europe and the return to growth in emerging markets," Valeo added in a statement.

But it added it was not certain that the momentum would be maintained in the fourth quarter because there was little visibility on the end of vehicle scrapping programmes.

Valeo made a second quarter net loss of 54 million euros ($76.39 million).

Sales fell 28.4 percent in the first half to 3.742 billion euros, as automobile production plunged 26 percent versus the same period a year earlier.

As of the end of June, the group had recorded 4,500 departures since the end of November, mostly as a result of the 5,000 headcount reduction plan the group launched late last year.

Valeo's Chief Executive Jacques Aschenbroich, who took over at the group earlier this year, said last month he saw signs that destocking by carmakers was coming to an end but confirmed a gloomy outlook for the industry.

Fellow French car parts maker Faurecia (EPED.PA), which is majority-owned by carmaker PSA Peugeot Citroen (PEUP.PA) last week reported a widened first-half net loss.

Faurecia raised its cost-cutting target and predicted a very slow recovery for the industry. [ID:nLL714676] Valeo has a cost-cutting plan in place that targets annualised cost savings of 600 million euros, of which 500 million euros in 2009. It said earlier this year it would cut 2009 investment by a third compared with 2008.

Valeo is 8.33 percent owned by the French state's strategic investment fund, which was set up to help companies cope with the financial crisis. [ID:nLP693700]

For a WRAPUP of automotive results released on Wednesday click on [ID:nLT388530] (Reporting by Helen Massy-Beresford; Editing by Rupert Winchester)