* New car registrations rise 40 percent in March - VDIK
* Scrappage bonus helps Germany buck weak global trend
* Car stocks among major outperformers in Frankfurt
(Adds analyst comments, share prices)
By Marilyn Gerlach
FRANKFURT, April 2 (Reuters) - New car registrations in Germany, Europe's biggest auto market, leapt 40 percent in March to around 401,000 units thanks to government incentives for motorists to junk old cars and buy new ones.
New car sales in Germany advanced by more than a fifth year on year even when adjusted for extra working days, data compiled by the VDIK car importers association showed on Thursday.
The upbeat news and signs of stabilisation in the U.S. automotive market buoyed car stocks in Germany and abroad. BMW and Daimler both rallied more than 13 percent to lead German blue-chip gainers.
A German government car-scrapping programme had prompted VDIK to forecast double-digit percentage growth in new registrations in the first quarter despite steep declines in other major markets.
U.S. car sales fell 37 percent in March while sales in Japan slumped by a quarter.
With an economic downturn reverberating across Europe's largest economy and key manufacturing data showing a collapse in new orders, vehicle sales have perked up due to a 1.5 billion euro ($1.98 billion) government car subsidy launched in February.
Berlin has now extended until the end of year the subsidy that pays owners 2,500 euros to scrap cars at least nine years old if they buy a new model in exchange.
"The decision to top up funds for the (bonus scheme) came just in time given that the money originally approved has run out," VDIK head Volker Lange said, calling the programme a key factor to shore up consumer confidence and stabilise demand.
The incentive has fuelled demand for small cars in particular but has drawn complaints from German retailers that the scheme is sucking demand away from other businesses.
UniCredit said the U.S. March sales figures contained encouraging signs that the auto sector is passing the trough.
"Credit financing is slowly improving and, all in all, we think the discussion that the sector is bottoming out and could see a recovery in 2010 is getting a new momentum by the March figures," UniCredit said in a note to clients.
"Despite the still large decrease year-on-year, we therefore view the March numbers as good news which should have a positive impact on the auto stocks in Europe" on Thursday, it added.