Tyre production in India is likely to rise to a record 121.4m units in fiscal year 2010/11 as companies boost capacity to meet booming demand from the local auto industry.

Rajiv Budhraja, director-general of the New-Delhi based Automotive Tyre Manufacturers' Association, told Reuters that every tyre company is expanding capacity. Demand is good from both original equipment and replacement segments.

He said tyre production in 2010/11 is likely to rise by a quarter from last year's 97.13m, driven by demand from the passenger car and two-wheeler segments.

Passenger car sales rose 33.6% between April-September this year compared with the same period a year ago according to the Society of Indian Automobile Manufacturers (SIAM). Two wheelers grew 25.86%.

Budhraja said: "Passenger car tyre production is growing by 25-30%. Off the road is also rising by 20-25%."

He added that he expects several million dollars worth of investment by tyre companies in the next three years although rising rubber prices may force tyremakers to raise prices again this year.

Indian tyremakers have raised prices by 11-14% in the commercial vehicle segment and by 18-20% in the passenger car tyre segment this year.