* VW sold 10.7 mln units in 2017, its highest ever
* Renault-Nissan says, excluding trucks, it is No.1
* Figures put German firm above Toyota with 10.35 mln (Adds Renault-Nissan comments)
FRANKFURT/PARIS, Jan 17 (Reuters) - Volkswagen (VW) hailed a record 10.7 million vehicle sales in 2017, a 4.3 percent rise, but the new total prompted the Renault-Nissan alliance to claim the crown as the world's leading automobile group on Wednesday.
Last year's sales by VW, which was the world's biggest carmaker by sales in 2016 but is still dealing with the fallout from a scandal over rigged diesel emissions tests, were lifted by strong gains in China, Europe and South America.
However, the Renault-Nissan alliance, which includes Mitsubishi Motors Corp, questioned the VW tally which Renault boss Carlos Ghosn said was lower if heavy trucks were excluded.
"The (Renault-Nissan) alliance, with more than 10.6 million light private and commercial vehicles sold in 2017, is the premier global automobile group," Ghosn told a parliamentary committee hearing in Paris.
"That has just been confirmed after Volkswagen this morning announced its sales of 10.74 million, including 200,000 heavy trucks, which we do not include in our statistics," Ghosn said, adding "there can be no further discussion" on who is now top.
Japan's Toyota Motor Corp said last month it expected 2017 sales to grow 2 percent to 10.35 million units worldwide across its Toyota, Lexus, Daihatsu and Hino brands. It said it would hit 10.5 million vehicles in 2018.
VW was No. 1 with 10.3 million vehicle sales in 2016, Toyota second with 10.2 million and Renault-Nissan third with 9.96 million.
VW said December 2017 China sales jumped 17.8 percent to 460,100 vehicles, while monthly sales in Europe rose 3.1 percent, driven by Germany. U.S. sales were down 5.2 percent.
Overall, carmakers saw European sales fall 4.8 percent in December from the same month a year ago due in part to one less working day, industry data showed on Wednesday.
VW has set aside about 25 billion euros ($30 billion) to cover fines, lawsuits and vehicle repairs related to the diesel scandal. (Reporting by Ludwig Burger in Frankfurt and Gilles Gillaume in Paris; Editing by Edmund Blair, Douglas Busvine and Alexander Smith)