A strong crop of results from carmakers Nissan Motor, Hyundai Motor and Volkswagen has failed to dispel fears of slowing demand from major markets such as China and the US.

A patchy recovery in the US 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 many markets will slow down the recovery.

Volkswagen, 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'.

VW stock was up around 2.9 per cent, outperforming the European autos index, up around 0.6 per cent by 1100 GMT.

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

Also in Germany, automotive parts supplier Continental  reiterated its confident outlook after a strong first half but shares fell 0.9 per cent.

'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, 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.

Truck sector rebound

German industrial group MAN 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.

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 has raised its operating profit forecast twice this year, while Sweden's Scania posted a record operating margin of 17 per cent.

MAN shares were down around 3.7 per cent, with traders saying good results were not enough to satisfy optimistic expectations.

Fears for second half

Nissan Motor Co, 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.

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, 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.

'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.

Under chief executive and chairman Chung Mong-Koo, Hyundai was a rare winner in the global financial crisis, winning market share with its lineup of cheap, cleverly marketed cars and SUVs.

Both Nissan and Hyundai have done well in China, but the economy there is slowing and industry sales growth is falling.

Other big markets are also struggling.

'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 on new car purchases and higher interest rates,' Hyundai executive vice president Lee Won-hee told investors. – Reuters