TOKYO, April 30 (Reuters) - Japan's factory output grew

more than expected in March, government data showed on Tuesday,

thanks largely to automakers resuming production after safety

scandals.

Industrial production rose 3.8% in March from the

previous month, the Ministry of Economy, Trade and Industry

(METI) showed, better than the median market forecast for a 3.5%

rise.

"Coupled with solid output forecasts for April and May, the

strong rebound in industrial production in March suggests that

the likely slump in GDP in Q1 should be followed by a strong

rebound this quarter," said Gabriel Ng, assistant economist at

Capital Economics.

Motor vehicle production rose 9.6% in March from the

previous month. Output in regular passenger cars and regular

trucks boosted the overall figures.

Japanese automaker Toyota Motor ( TM ) restarted

production of some models in early March after irregularities in

certification tests were found in affiliate Toyota Industries' ( TYIDF )

diesel engines.

Toyota's ( TM ) small-car unit Daihatsu, which was mired by

misconduct related to rigged collision-safety tests, has

gradually resumed vehicle production from February onwards.

"We'll continue to monitor the global economy and the

resumption of plant operations by the automobile industry," a

METI official said.

The manufacturing of production machinery, including

semiconductor production equipment, went up 11.6%. Electronic

parts and device output increased 9.2%, according to METI.

Manufacturers surveyed by the industry ministry expect

seasonally adjusted output to increase 4.1% in April and expand

4.4% in May.

However, the METI official said a prolonged production

disruption at Toyota's ( TM ) domestic plant over quality checks for

Prius cars could put downward pressure on factory output in

April.

Separate data showed Japanese retail sales expanded 1.2% in

March from a year earlier. The result was below the median

market forecast for a 2.2% rise but marked the 25th consecutive

month of expansion.

Compared with the previous month, retail sales shrank 1.2%

in March, following a 1.7% gain in February, the data showed.

(Reporting by Satoshi Sugiyama; Editing by Chang-Ran Kim,

Christopher Cushing and Lincoln Feast.)