* German new car sales down 17 pct in March -VDA
* German Q1 new car sales down 13 pct at 674,000 -VDA
* VW Q1 German sales down 17 pct, worse than Opel, Fiat -KBA
BERLIN, April 3 (Reuters) - Germany's new car market may stabilise in the second quarter, the country's main auto association said, after a further plunge in sales in the first quarter mirrored declines in other key European regions.
New registrations in Europe's biggest auto market fell 17 percent in March to 281,200, the VDA car makers' association said on Wednesday, noting that two fewer working days last month helped bring about the steep drop.
French car sales fell 16.4 percent in March while Spanish deliveries declined 13.9 percent as consumers in recession-hit southern European countries postponed purchases. Italian new car sales fell 4.9 percent.
"I trust that the market will stabilise in the second quarter," VDA President Matthias Wissmann said, noting that first-quarter sales fell 13 percent to 674,000 vehicles. "Germany's economic outlook is still looking robust."
The euro zone crisis has turned long-standing overcapacity into an urgent problem for mass-market manufacturers, although German automakers seen as having the most valuable brands are weathering the storm better than rivals.
Still, Volkswagen, Europe's biggest carmaker which resisted most of last year's slump, suffered a 17 percent drop in Germany-wide sales between January and March, worse than declines of 15.5 percent at General Motors Co.'s Opel division and 6.8 percent at Italian rival Fiat, according to Germany's KBA motor authority.