WRAPUP 3-Carmakers' profits soar; H2 doubts in focus

* VW shares rise after strong H1

* Continental upbeat on 2010

* Truckmaker MAN sees rising orders this year

* Pirelli posts strong H1, raises forecasts

(Adds Pirelli results, executives' comments, updates shares)

By Chang-Ran Kim and Christiaan Hetzner

YOKOHAMA/MUNICH, July 29 (Reuters) - A strong crop of results from carmakers Nissan Motor Co, Hyundai Motor Co and Volkswagen AGfailed to dispel fears of slowing demand from major markets such as China and the United States.

A patchy recovery in the United States is a big industry concern, in particular for Japanese carmakers, which rely heavily on that market for profits.

And in Europe carmakers cheered by signs that underlying demand was coming back as scrapping schemes ground to a halt are now fearful that austerity measures including tax hikes in some markets will slow down the recovery.

Volkswagen (VOWG_p.DE), Europe's largest carmaker, said on Thursday it was confident it would improve sales and margins in the full year, but warned the strong growth it saw in the first half "would not continue undiminished". [ID:nLDE66R2H8] <^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^ StarMine valuation data: r.reuters.com/jap22n For a graphic on Europe's automakers click on: here For a graph on Hyundai's results: r.reuters.com/kyn22n Analysts views on Hyundai's earnings [ID:nTOE66R08D] ^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^>

VW stock was up 3 percent, outperforming the European autos index .SXAP, which was up around 0.7 percent by 1410 GMT.

"Volume is a large part of the story -- despite falling German sales, VW grew sales in the second quarter in the UK, Spain, U.S., China and Brazil," Bernstein analysts wrote in a research note.

Volkswagen CFO Hans Dieter Poetsch said the company needed to add more production capacity in China fast, with current output "right at the edge of capacity utilisation".

Also in Germany, automotive parts supplier Continental (CONG.DE) reiterated its confident outlook after a strong first half. [ID:nDE66S0CW]

Rival tyremaker Pirelli & C SpA (PECI.MI) of Italy raised its sales and operating margin forecasts after beating expectations for its first-half results. [ID:nLDE66S0ZD]

Continental shares fell 1.6 percent while Pirelli slipped 0.7 percent.

"The whole sector has run up into second-quarter reporting, said Credit Suisse's David Arnold. "The question is how does the second half play out. The implications for the second half and 2011 are what everyone wants to understand," he added.

Andre Lacroix, CEO of multinational car dealer Inchcape (INCH.L), echoed the uncertainty.

"We are seeing an uneven global recovery: very strong recovery in Asia-Pacific and emerging markets overall, and a bit more moderate growth in mature markets," he said.

"This is still a very volatile market out there and we are cautious," he told Reuters after Inchcape beat profit forecasts and said it would reinstate its dividend. [ID:nLDE66R1IW]

TRUCK SECTOR REBOUND

German industrial group MAN SE (MANG.DE) returned to profitability in its core European truck operations in the second quarter as promised and forecast a significant increase in group order intake for the full year. [ID:nLDE66R2HA]

MAN was the latest in a string of truckmakers to sound an optimistic note, showing that the sector is getting back on its feet after demand for new trucks halved virtually overnight when the global economic slowdown struck.

Industry leader Daimler Trucks (DAIGn.DE) has raised its operating profit forecast twice this year, while Sweden's Scania (SCVb.ST) posted a record operating margin of 17 percent. [ID:nLDE66M1BL] [ID:nLDE66M0ER]

MAN shares were down 3.1 percent, with traders saying good results were not enough to satisfy optimistic expectations.

FEARS FOR SECOND HALF

Nissan Motor Co (7201.T), Japan's No.3 automaker, reported its strongest quarterly operating profit in more than two years as sales surged, but it left its cautious guidance unchanged amid an increasingly murky outlook for demand. [ID:nTOE66R05I]

Yoshihiro Okumura, general manager at Chibagin Asset Management, said: "It was natural that they didn't change the forecast, given uncertainties in the latter half of the year."

South Korea's top automaker, Hyundai (005380.KS), beat forecasts but warned global car demand will likely ease in the second half due to a slowdown in key markets like China, Europe and the United States. [ID:nTOE66Q086]

"After a series of bullish earnings, market focus now is whether the second quarter might have been the peak," said Oh Hyun-Seok, an analyst at Samsung Securities in Seoul.

Hyundai Executive Vice President Lee Won-hee said: "Global car sales in the second half are seen slowing slightly from the first half due to fiscal crises in some European countries, the end of governments' incentives ... and higher interest rates."

(Additional reporting by Miyoung Kim, Aiko Hayashi, Chyen Yee Lee, Suh Kyung-min, Mark Potter, Helen Massy-Beresford and Nigel Tutt; Editing by Lincoln Feast and Michael Shields) ($1=1185.0 Won=87.47 Yen)