India, June 25 -- Europe's new car registrations increased in May as demand for plug-in hybrid cars grew sharply from the last year, the European Automobile Manufacturers' Association, or ACEA, reported Wednesday. New car sales increased 1.6 percent on a yearly basis in May, faster than the 1.3 percent rise in April. This was the second consecutive rise in registrations.

The annual growth was largely driven by the 46.9 percent surge in plug-in hybrid car sales. Registrations of battery electric and hybrid electric cars advanced 25.0 percent and 16.0 percent, respectively.

Meanwhile, petrol car sales decreased 18.6 percent and diesel car sales fell 27.6 percent from a year ago.

Among the largest euro area economies, Spain registered a sha...