Auto production in Brazil reportedly surged in March, as strong exports helped the sector avoid the impact of higher interest rates that have hurt overall industrial output.

According to the Associated Press, Brazil's national automakers association, known as Anfavea, said on Wednesday that vehicle output rose 17.5% in March from February and 14% from a year earlier while auto sales jumped a hefty 30% from a month earlier and 5.5% from March 2004.

By contrast, overall industrial output has slipped, AP noted, adding that the government said industry did worse than expected in February, declining 1.2% from January although rising 4.4% from a year earlier.

But the auto sector reportedly was driven by strong exports, which brought in $US936.5 million (€728.2 million) in March - up 26% from February and 31% higher than in March last year.

AP said that, in the first three months of this year, Brazil produced 565,000 vehicles, 12.5% more than in the same period in 2004, while local sales rose a modest 4.8%, and exports jumped 36%.

Volkswagen was the top seller in the first quarter, followed by General Motors, Fiat and Ford, the Associated Press said.