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Mexican auto production, exports and new car sales fell sharply in March, although the declines were less drastic than those registered in the first two months of the year.

The Mexican Auto Industry Association, or AMIA, said Tuesday that production fell 32% to 102,720 units, compared with year-on-year declines of 51% in January and 38% in February.

Exports last month were down 21% from March 2008 at 101,831 units, a marked improvement over the 57% drop in January and 45% drop in February.

The decline in domestic new car sales also eased, with sales falling 20% in March to 64,242 units after sliding 29% in February and 28% in January.

But AMIA President Eduardo Solis said last month's numbers painted a deceptively rosy picture due to a positive calendar effect. Easter fell in April this year rather than March, resulting in more business days last month than in March 2008.

Solis said low consumer confidence and "very grave" credit conditions are continuing to hamper domestic new-car sales at the same time as the global economic crisis hacks away at external demand.

He reiterated AMIA's estimate that Mexican auto production, exports and domestic sales will fall by 20-25% this year, adding that he doesn't see growth in production until near the end of 2010.

Solis also repeated the industry's call for the Mexican government to stimulate the local new-car market through tax cuts, fiscal stimulus and increased regulation of used cars.

From January to March, Mexico's auto production fell 41% at 291,800 units from the year-ago period. Exports fell 41% to 230,725 units, and sales fell 26% to 195,484.

Exports to the U.S., Mexico's largest market, fell 40% from January to March to 166,025 cars.

-By Paul Kiernan, Dow Jones Newswires; (5255) 5001 5726; paul.kiernan@dowjones.com