Demand for cars in Europe moved up another gear in March and struggling French group Peugeot Citroen did well, trade data showed on Thursday, but the market is still suffering badly from a recent slump. Sales of new cars in the European Union surged by 10.6 percent last month on a 12-month comparison to a total of 1.45 million. Sales rose in all countries in March with the British market leading the way, jumping 17.7 percent, followed by an increase of 10.0 percent in Spain, 8.5 percent in France, 5.4 percent in Germany and 5.0 percent in Italy. The recovery is broadly in line with general economic data suggesting that the impact of the eurozone debt crisis, and of austerity reforms, is fading as growth and confidence edge upwards. Sales of French Renault's cheap Dacia cars shot up by half in the month. In the first quarter of the year, sales in Britain rose by 13.7 percent, Spain 11.8 percent, Italy 5.8 percent, Germany 5.6 percent and in France by 2.9 percent. French manufacturers benefited strongly from the March rally, and the upturn gave a boost to Peugeot Citroen which has just announced a new strategy to pull away from deep financial crisis, the data showed. But the latest overall figure for sales in the EU, except Malta, was the second-lowest for a month of March since the current series of data began in 2003, the European Automobile Manufacturers' Association said. Demand for new passenger cars in the EU increased for the seventh consecutive month, with a rise of 10.6 percent in registrations," the association said in its monthly report on the market in the 28-member European Union. This meant that in the first three months of this year, registrations of new cars showed an increase of 8.4 percent from the figure a year ago, to total nearly 3.247 million. The European car market shrank sharply as the impact of the global financial crisis, and then the eurozone debt crisis began to bite and some governments introduced subsidies to encourage owners of old cars to scrap them in return for buying new vehicles. These subsidies helped the industry for a period but as they were wound down, several manufacturers again faced tough conditions, notably groups such as Peugeot which are more dependent on the European market. The giant German group Volkswagen group, however, weathered the storm well, largely because its brand has a strong position on international markets and particularly in up-market segments where margins are good. - Recovery takes shape - PSA Peugeot Citroen was badly hit by the downturn, and in the last two years has had to close some production capacity and was effectively rescued with French state guarantees. The group is now in the process of acquiring the French government and Chinese state-owned Dongfeng auto maker as shareholders. In March alone, Peugeot Citroen raised sales by 10.9 percent, with the Peugeot brand doing better than Citroen. Both brands have launched new models recently. The other big French auto group, Renault, boosted sales by 30.4percent, and sales by its low-cost brand Dacia shot up 53.5 percent. Sales by US group Ford and Nissan of Japan, which is allied to Renault, grew by slightly more than 10.0 percent, while Volkswagen boosted its sales by 8.6 percent. Sales by US maker GM, which owns the European brands Opel and Vauxhall, rose by 7.2 percent, and Italian Fiat raised its sales by 4.6 percent. Manufacturers in Europe are hoping that, after a fall of the market in 2013, sales for the whole of this year should show an increase. Peugeot Citroen says the market could grow by about 3.0 percent, while the head of Renault, Carlos Ghosn, believes that a big recovery in Europe is taking shape.