LONDON, March 17 (Reuters) - European shares scaled new 7-1/2 year highs on Tuesday, boosted by gains in Volkswagen on the back of positive industry sales data and by UK retailer Sainsbury's after a trading update.
Shares in Volkswagen rose 2.2 percent after industry data showed new car registrations in Europe rose 7 percent in February, with demand shifting from no-frills makes like Dacia toward mass market brands like VW.
Sainsbury's rose 2.3 percent, with analysts saying its results, while showing a fifth straight quarter of declining underlying sales, were better than the market had feared.
The pan-European FTSEurofirst 300 index was up 0.2 percent at 1,597.17 at 0810 GMT, hitting its highest level since late 2007.
(Reporting by Francesco Canepa; Editing by Sudip Kar-Gupta)