UPDATE 1-Auto recovery takes firmer hold in France

Fri May 2, 2014 4:51am EDT

* April car registrations up 5.8 percent at 166,968 cars

* Renault group sales up 18.4 percent (Adds comments, details, background)

By Laurence Frost and Gilles Guillaume

PARIS, May 2 (Reuters) - New Renault models led a 5.8 percent rise in French car sales in April, as a recovery in European auto demand took a firmer hold in the region's third-biggest market.

Total registrations advanced to 166,968 cars in the month, giving a 3.7 percent gain for January-April, industry association CCFA said in a statement on Friday.

Europe's car market is slowly recovering from a six-year slump, but excess capacity continues to weigh on the earnings outlook of companies in the sector who have been forced into margin-crushing discounts.

French sales growth has lagged behind other major European auto markets in recent months, but the April data suggests a brightening horizon, particularly in fleet sales.

"It was mainly corporate buyers who carried the month, while consumer sales are down a little," CCFA spokesman Francois Roudier said. Consumer spending is still "marked by great caution", he added.

The registrations uptick was achieved despite April's Easter holiday, which had fallen in March last year, Citi analyst Philip Watkins said. Renault had "significantly outperformed" the market, he added.

The French carmaker has benefited from a surge in demand for low-cost cars among budget-conscious consumers. The Renault group's 18.4 percent sales gain was powered by a 45.6 percent advance at its no-frills Dacia brand.

Domestic rival PSA Peugeot Citroen, which lacks a dedicated budget vehicle architecture, saw April sales rise 5.1 percent, in line with the market.

European market leader Volkswagen saw registrations advanced a more modest 1.3 percent.

Sales of light commercial vehicles such as delivery vans meanwhile rose 2.2 percent in April, the CCFA said, for a 5.2 percent gain in overall light vehicle registrations including cars. (Editing by Dominique Vidalon and David Holmes)