LONDON, March 23 (Reuters) - British car production hit a 17-year high in February, extending a recent trend of surging output as a strong rise in exports once again compensated for a slump in demand at home, an industry body said on Thursday.

Overall production rose 8 percent to 153,041 cars last month, according to the Society of Motor Manufacturers and Traders (SMMT), boosted by a 13 percent increase in sales to overseas markets.

The roughly 15 percent fall in the pound against the euro since the Brexit vote has helped to make British exports cheaper to many foreign buyers, although it has increased the cost of importing parts from the continent for UK-assembled models.

Britain’s overwhelmingly foreign-owned car industry backed remaining in the European Union and is worried about the possible end to tariff-free business with Europe, its biggest export market, despite reassurances from Prime Minister Theresa May.

“We must avoid barriers to trade, whether tariff, customs or other regulatory obstacles, at all costs,” said SMMT Chief Executive Mike Hawes.

“To do otherwise would damage our competitiveness and threaten the continued success of UK automotive manufacturing,” he added. (Reporting by Costas Pitas; Editing by Keith Weir)