Defending champions Spain slumped to a 2-0 defeat to Chile and crashed out of the World Cup on Wednesday after their second defeat in five days.

Chile's victory - through goals from Eduardo Vargas and Charles Arranguiz - made the South Americans and the Netherlands the first teams to go through to the second round.

Chile's Eduardo Vargas celebrates after scoring the opening goal. Credit:AP

After a golden era that saw them win the European Championships in 2008 and 2012 and the World Cup in 2010, Spain have suffered a dramatic fall from grace. They equalled Italy's unwanted record in 1950 of being booted out of the World Cup after just two games.