By Alberto Alerigi and Roberta Vilas Boas
SAO PAULO, Sept 5 (Reuters) - Brazil's auto industry stepped up production in August and raised its 2013 production outlook as exports surged to their strongest since at least 2010.
Automobile output in Brazil rose 9.0 percent in August from July, national automakers association Anfavea said on Thursday. Anfavea now expects production to grow 11.9 percent this year, sharply up from a prior outlook for 4.5 percent growth.
A 22 percent surge in August vehicle exports kept factories busy, boosted by the hottest U.S. auto market in nearly six years. Foreign demand offset stagnant sales in Brazil, where new registrations slipped 3.8 percent, according to Anfavea.
Brazil's exports have become more competitive as a result of a weaker currency, which makes locally made goods cheaper in dollars. Brazil's real has slipped about 12 percent against the dollar this year, the fourth-biggest slide among the world's 36 most-traded currencies.
Demand overseas is making up for a dimming outlook in Brazil, where plunging consumer confidence and rising interest rates are threatening to erode auto sales for the first time in a decade. New registrations through August this year have slipped 1.2 percent from the first eight months of 2012.
Automakers trimmed their outlook for growth in sales in Brazil this year to between 1 and 2 percent from a prior forecast of 3.5 to 4.5 percent, Anfavea said.
The Brazilian auto market has expanded every year since 2013, making it the world's fourth largest, but the industry has relied on tax breaks and state-subsidized loans to keep up the pace of sales since last year.
Italy's Fiat SpA, Volkswagen AG of Germany and U.S.-based General Motors Co and Ford Motor Co sell more than 70 percent of new cars in the market.
Fiat remained Brazil's top seller of cars and light trucks in August, with about 66,000 new registrations. GM stayed in front of VW, selling some 58,500 passenger vehicles compared with the German automaker's roughly 56,500 cars and light trucks. Ford sold about 31,500 vehicles.
French car maker Renault SA extended its lead over Hyundai Motor Co with about 22,000 new registrations compared with the South Korean rival's roughly 16,500 sales.