Car production in Spain, Europe's third-biggest producer, rose 5.5% to 736,421 units in the first quarter of 2006, as output of industrial and SUV vehicles rose strongly, top manufacturers' federation Anfac said on Thursday.

This contrasts with a 10% fall in car sales during the three-month period amid a declining number of exchanges under the Spanish used-car scrapping incentive called Prever.

In March, factories made 10% more cars, output of 271,975 units, Anfac said. The hike was boosted by a 7% output rise for compact sedans.

Anfac said that healthy car sales in key European markets (which rose 4.2% in the quarter) helped boost Spain's productivity.

During the quarter, SUV output soared 139% to 29,266 units while the commercial vehicle segment recorded an 8.12% jump to 156,714 units. Compact sedan output rose 1.83% to 550,441 units, Anfac added.

Exports, which account for 80% of Spain's car production, rose 1.3% to 434,739 units during the January-March period and increased 6% in March.

Ivan Castano