UPDATE 2-Mexico's 2008 auto output, exports seen up 10 pct

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MEXICO CITY, Dec 4 (Reuters) - Mexico is seen raising auto production and exports 10 percent in 2008, Cesar Flores, the head of industry group AMIA told Reuters on Tuesday, despite expectations of slower U.S. economic growth.

The forecast was in line with the current growth of production and exports, which were up 10.3 percent and 9.4 percent, respectively, in October.

It was also similar to AMIA's expected full-year 2007 expansion estimate of between 10 percent and 12 percent for both exports and output of cars and trucks.

The Mexican economy grew 4.8 percent in 2006 but has lost steam this year because of lower demand for exports from the United States, the country's main trade partner.

The U.S. economy has been hit by a weak housing market after subprime mortgage problems sparked a credit crunch in August.

The economy in the United States grew at a 3.9 percent clip in the July-September period, but is expected to lose steam in the final three months of the year, with some warning it may barely expand.

Mexico sends more than 80 percent of its exports to the United States, making it particularly vulnerable to the U.S. economy.

Mexico's industrial sector grew a sluggish 1.8 percent in the third quarter although expansion in the automobile sector, which exports about three quarters of its production, has picked up in recent months.

Mexico's government expects the economy to grow about 3 percent this year and 3.7 percent next year. (Reporting by Noel Randewich; Editing by Diane Craft)