UK's vehicle output rose in March, but not enough to prevent quarterly decline

(Reuters) -Britain made more vehicles in March as demand increased for British-built cars overseas and for commercial vehicles at home, but it was not enough to prevent a quarterly decline in output, industry data showed on Friday.

A total of 79,018 cars, vans, trucks, taxis, buses and coaches were manufactured in the last month, up 17.1% from a year ago, the Society of Motor Manufacturers and Traders (SMMT) said.

Despite the growth in March, UK vehicle production fell 6.3% in the first quarter that was clouded by concerns around new U.S. tariff announcements.

U.S. President Donald Trump is planning to spare carmakers from some tariffs following intense lobbying by industry executives over recent weeks, the Financial Times reported on Wednesday, citing a couple of people familiar with the matter.

The exemptions, however, would leave in place the 25% tariff Trump imposed on all imports of foreign-made cars, the report said.

"Manufacturers face considerable uncertainty heading into quarter two as U.S. demand likely weakens with knock on effects on other markets and the supply chains," SMMT said.

The U.S. is the second-biggest importer of British-made cars after the European Union.

"Trade discussions must continue at pace to reach a deal that supports jobs, demand and growth on both sides of the Atlantic," the trade association said.

SMMT also urged a rapid response from the UK government, given the immediate challenges facing the industry's exports.

(Reporting by Shanima A in Bengaluru; Editing by Sahal Muhammed)