Michelin added to the gloom enveloping the auto industry with a sharper decline than expected in operating profit for the first half of 2008 amid sharply falling sales in western Europe and soaring raw material costs.

The world’s second largest tyremaker by market capitalisation also issued its second profit warning in three months. The family-controlled company said it expected an operating margin in the second half of the year “approaching” the 8.6 per cent seen in the first half instead of its original target of 9.8 per cent.