Passenger-car sales in the region's biggest market jumped 9 percent last month to 323,100 autos, expanding first-quarter registrations by more than 6 percent, the VDA auto industry association said on Thursday, confirming an earlier Reuters story.

In Europe's other large car markets, sales gained 9.3 percent in France, 15 percent in Italy and 41 percent in Spain, according to industry data released earlier this week.

"Germany is rebounding from very low levels and consumers are growing increasingly more optimistic," said London-based Evercore ISI analyst Arndt Ellinghorst. "That development can be traced across Europe."

Demand for replacement cars is driving the European recovery following a six-year sales slump in the region prior to 2014, analysts said.

Germany's 9 percent sales gain in March is the highest monthly increase since August 2011 when registrations jumped 18.3 percent, according to records of the KBA federal transport authority. A brand-by-brand breakdown was expected later on Thursday.

The accelerating pace of auto registrations coincides with upbeat data about the state of the German economy.

The country's jobless rate hit a record low of 6.4 percent in March while the closely-watched Ifo business climate index was up for a fifth straight month, beating consensus forecasts.

Besides commercial registrations, car demand in Germany is also being driven by private household purchases which climbed almost 5 percent in March, VDA said, reflecting robust consumer morale buoyed by an inflation-busting pay rise agreed in the key metal and engineering industry in February.

Ellinghorst said 90 percent of German car dealers expect business to improve or remain stable over the next three months, reflecting broadly stable discounts and improved used vehicle prices.

The March figures "give reason to be optimistic about the further course of the year," VDA president Matthias Wissmann said. "But we remain vigilant as global crisis spots and the dramatic slump of the Russian economy still pose risks to economic development in Germany and Europe."

(Reporting by Andreas Cremer and Jan Schwartz.; Editing by Maria Sheahan and Vincent Baby)

By Andreas Cremer and Jan Schwartz

Stocks treated in this article : Bayerische Motoren Werke AG, Daimler AG, Volkswagen AG