VW car sales fell almost 3% from last year's figures

The German firm said pre-tax profits for the first half of the year were 1.01bn euros ($1.16bn; £717m), down 55% from the year before.

Sales were down only slightly, but costs soared as VW absorbed the expense of restructuring.

The cost of developing new products also dragged profits downwards.

But just as important was the surge in the value of the euro, which hit all-important export sales.

As expected

The figures came as little surprise to analysts, who have already seen French rivals Peugeot-Citroen and Renault report sharply lower profits a day earlier.

The same day, fellow German carmaker Daimler-Chrysler had turned in a loss of almost a billion euros for the second quarter alone.

In any case, the main elements of VW's tribulations were well flagged in advance.

Its flagship Golf model is ageing, and new versions of it and other cars in its range such as the new Touran and Touareg are due to be unveiled roughly every three weeks throughout this year - at a high cost in development and marketing.

On top of that, VW is more exposed to currency movements than some of its peers.