REFILE-UPDATE 3-Volkswagen sees strong demand in months ahead

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* Volkswagen Q2 sales rise 21.5 percent

* Operating profit rises 59 percent, below forecast

* Vehicle deliveries up 15 percent at 2,140,000

* Flattered by 2.5 bln eur valuation gain on Porsche options

* Shares down 5.1 percent, underperform autos sector

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FRANKFURT, July 28 (Reuters) - Volkswagen (VOWG_p.DE) predicted a significant rise in operating profits this year driven by strong demand around the world for its Audi and VW cars.

While that demand is expected to underpin strong sales volumes, VW again cautioned that high costs for raw materials as well as volatile interest and exchange rates, could put a squeeze on margins.

VW's operating margin grew to 7.9 percent in the second quarter from 6.0 percent a year earlier.

Shares in Europe's biggest car maker were down 5.1 percent after the company unveiled a 59 percent rise in second quarter operating profit to 3.17 billion euros. However, this fell short of the 3.22 billion consensus in a Reuters poll.

VW was underperforming the STOXX Europe 600 Automobiles and Parts index , which was down 1.6 percent, but one Frankfurt-based trader said he was sanguine about the margin squeeze.

"As usual the outlook includes a mixed tone but one should not read too much into this," he said.

Max Warburton at Bernstein Research said: "While the second quarter did not show the advance that some of us were anticipating, profitability remains robust"

Vehicle deliveries were up 15 percent in the quarter, boosted by the launch of a new Passat in China, the launch of the new Beetle in the U.S. and Europe as well as solid demand for premium brand Audi.

Volkswagen said it expected global demand for passenger cars to be higher this year than in 2010, adding positive growth trends in China and India are set to continue.

It expects the global market for cars to grow by a maximum of 6 percent, and plans to outperform the market. Overall, Volkswagen said that despite the pace of growth slowing in some markets, global car markets will reach an all-time record.

German truck maker MAN also hiked its outlook, saying it saw revenue growth of 10-15 percent in 2011. MAN posted second-quarter operating profit of 437 million euros ($627.6 million), up 58 percent from the year-earlier period and just ahead of the 428 million euro forecast in a Reuters poll.

BUMP IN THE ROAD

Volkswagen signalled it had hit a speed bump on plans to integrate Porsche (PSHG_p.DE) as it seeks to overtake Japan's Toyota Motor as the world's No.1 player by 2018.

The maker of the Beetle and the Golf models said it was "preparing for the eventuality that a resolution on the merger will not be adopted this year," adding it still sees the chances at 50:50.

Volkswagen, which also makes the Passat, Tiguan, and Polo, said it remains committed to its goal of creating an integrated automotive group with Porsche, regardless of how it ultimately tries to achieve this.

In the meantime, the group pocketed a 2.5 billion euro ($3.6 billion) gain in its net profits related to the revaluation of put and call options linked to the deal, a spokesman for Volkswagen said.

Cooperation with Suzuki was "developing more slowly than expected and is not being implemented with the desired level of intensity," the German carmaker said.

(Reporting by Edward Taylor; Editing by Chris Wickham and Erica Billingham) ($1=.6963 Euro)