Volkswagen has reported a sharp fall in quarterly operating profit and lowered its revenue outlook, blaming weaker sales in China and intensifying competition from domestic Chinese manufacturers. The results increase pressure on the German carmaker to carry out a major restructuring programme, including plans to cut up to 100,000 jobs and reduce its range of models.

Operating profit fell 9.5% to €3.5bn in the second quarter, while the company now expects annual sales to decline by up to 3%, rather than rise by 3%. Global deliveries fell 6.3% to about 4.1m vehicles in the first half, with Chinese sales down more than 31%, although sales increased in Europe and North America; Volkswagen employs over 650,000 people across brands including Audi, Porsche and Skoda.