Fiat's new Punto model has helped to revive the carmaker's fortunes

New models, such as the Grande Punto, pushed Fiat sales up 6.4% in Europe in the first three months of the year.

Its market share is up to 8.3% from 7.8%, said the European Automobile Manufacturers Association (ACEA).

Meanwhile, a slump in demand for Renault's Megane and subcompact Clio saw the French carmaker's share of the market fall to 8.3% from 9.2%.

France's second-biggest carmaker saw sales drop 9.9%, but Renault is hoping to win customers back with the new Twingo small car and Laguna midsized model due out later in the year.

The ACEA survey covered 28 European countries.

Mixed performance

Japan's Toyota clocked the biggest sales lift of 12.9%, taking its market share up from 5.5% to 6.2%.

Global sales at Toyota - which makes the energy-efficient Prius hybrid and popular RAV4 sports car - are tipped to surpass Detroit-based General Motors this year.

While Volkswagen Group remained number one in Europe, sales inched up just 0.1% supported by demand for the Skoda and Audi brands. Sales of Volkswagen branded cars fell 4.8%.

Overall total car sales declined 0.2% over the quarter in Europe, but there were mixed performances across the continent.

Purchases in Germany dropped 6.6% after an increase in sales tax from 16% to 19% was introduced in January.