UPDATE 1-German car sales fall for first time in five months

Mon May 5, 2014 6:28am EDT

* German April sales dip; France, Italy sales rise

* German sales down year-on-year in part due to Easter

* Lower demand in Germany shows Europe recovery fragile (Adds official figures, expert comment, context on Italy, France)

FRANKFURT, May 5 (Reuters) - Sales of new cars in Germany, Europe's biggest auto market, declined 3.6 percent in April, the first drop for five months, in a sign that a recent recovery in demand remains fragile.

German passenger car registrations dipped to 274,097 in April, the Department of Motor Vehicles (KBA) said on Monday.

The drop stands in contrast to France and Italy, where April car sales rose 5.8 and 1.9 percent respectively.

Peter Fuss, German autos expert at Ernst & Young, said there were various factors at play. "One of them is the fact that Easter was in April and not in March. But on the whole it means that the market is still volatile and not as stable as some people would like."

Europe's car market has shown signs of recovery from a six-year slump, but excess production capacity and steep discounting continue to distort the true level of demand.

Compact cars remained the most popular vehicle category, accounting for 25.6 percent of overall sales in Germany, the KBA statistics showed.

Premium brands Audi, Mercedes and BMW saw registrations fall between 2 and almost 6 percent, with market leader Volkswagen recording a sales decline of 4.9 percent.

Nissan, Mazda and Jeep were the top gainers, each seeing sales increases of more than 20 percent, KBA said.

Overall, four-month registrations in Germany were up 2.9 percent, KBA said. (Reporting by Edward Taylor; Editing by Mark Potter)

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