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Polish car production rebounds in April

* Production up 1 pct in April y/y after 20 pct fall in March

* Rise follows rebound in German car factories

* Could signal start of recovery in European car mkt

By Marcin Goettig

WARSAW, May 9 (Reuters) - Polish car production rose in April for the first time in 18 months, tracking a rebound in Germany and a further sign that Europe's car market may be picking up, industry monitor SAMAR said on Thursday.

Fiat, General Motors and Volkswagen make cars in Poland, accounting for about 7 percent of Polish industrial output, but the industry has been hit by weak demand in the euro zone.

That has added to a sharp slowdown in the Polish economy since last year and increased unemployment as Fiat, the largest carmaker in the country, was forced to lay off around a third of its workers in Poland.

In April, the number of passenger cars and trucks produced in Poland rose 1 percent year-on-year to 54,303 after a 20 percent drop in March and a 29 percent decline in February.

SAMAR said the rise could signal the start of a gradual recovery for the car industry in Europe including Poland, considering that German car production rebounded 17 percent in April.

"It seems that very slowly the situation is also improving at Polish factories," SAMAR said in a statement.

After a five-year contraction in the European car market, automakers are watching for signs of recovery which they expect later this year. Car sales are still falling in France and Italy but sales in Britain rose 15 percent in April, their best performance since 2008.

In Poland, nearly 99 percent of cars assembled are for export, mostly within Europe.

Polish manufacturing output is expected to rise 2.8 percent in annual terms in April, according to a Reuters poll.

Poland is the only economy in the European Union to have avoided recession since 2008 but the central bank expects economic growth this year of 1.3 percent, the slowest in 12 years.