European car sales return to growth in 2014

* EU car registrations rise 5.7 pct in 2014

* Car (HKSE: 0699.HK - news) registrations reach 12,550,771 in 2014

* Registrations in EU and EFTA up 5.4 pct (Recasts, adds analyst comment)

FRANKFURT, Jan 16 (Reuters) - European Union passenger car registrations rose 5.7 percent in 2014, thanks to government incentives, tax breaks and a consumer shift to cheaper brands like Dacia and Skoda that helped the market to return to growth after six consecutive years of declining sales.

An 18 percent rise in demand in Spain and a 9.3 percent increase in registrations in Britain in 2014 took passenger car registrations to 12,550,771 deliveries in the European Union (EU), industry association ACEA said on Friday.

But the jump in car sales was primarily driven by discounting, state-backed incentives and wholesale orders, rather than a genuine recovery of consumer confidence.

"Not since the year 2000 have so few cars been bought by private individuals," Peter Fuss, an automotive analyst at EY said in a note on Friday, referring to the fact that corporate and commercial purchases made up a large chunk of the sales.

In Spain, the government has repeatedly extended an incentive scheme, known as Plan PIVE, which offers price cuts on new low-emission vehicles. Under the scheme, people who scrap their old car and buy a new one get a reduction of 2,000 euros ($2,323), half from the government and half from the carmaker.

"The European car market has bottomed out, but is only gradually emerging out of crisis mode", Fuss said, adding that growth will slow in the coming year to around three percent, to about 13 million cars.

In Western Europe, which includes the EU and countries belonging to the European Free Trade Association such as Norway, Iceland and Switzerland, registrations rose 5.4 percent to 13,006,451 passenger cars, ACEA said.

Sales of value brand Dacia, which is owned by Renault , rose 23.3 percent in 2014, while Volkswagen (Other OTC: VLKAF - news) 's Seat division also had a 14 percent sales increase, outpacing premium brands Audi (Other OTC: AUDVF - news) , BMW (Swiss: BMW.SW - news) and Mercedes (Xetra: 710000 - news) which grew less than 6 percent.

France recorded a 6.8 percent fall in registrations in December, as consumers continued to hold back on spending because of the economy's uncertain outlook. Last month, France's CCFA auto industry association said it saw no reason to expect the market to pick up in 2015.

December registrations in the European Union rose 4.7 percent to 951,329 vehicles, and increased by 4.9 percent in Western Europe to 997,238 cars, ACEA figures showed. ($1 = 0.8610 euros) (Reporting by Edward Taylor; Editing by Maria Sheahan and Jane Merriman)