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India's May tyre production up 11 pct yr/yr

NEW DELHI, July 22 (Reuters) - India's tyre production grew for a fifth straight month in May, rising 11 percent by volume from a year earlier, figures released on Monday by an industry body, showed.

Overall production in May rose to 3.93 million tyres from 3.53 million in the same month a year earlier, according to the Automotive Tyre Manufacturers Association (ATMA).

Average monthly output in the first two months of 2002/03 (April-March) at 3.83 million was up 12 percent year-on-year, the data showed.

Tyre production in India grew just 2.5 percent in the past year, slightly higher than the preceding year's 1.4 percent.

This was sharply lower than the seven to eight percent growth seen in the years before that as India's vehicle sales dropped in a slowing economy.

Industry officials have forecast tyre production will grow five percent in the current year to March 2003 as rising cement and steel sales boosts freight movement.

India's tyre industry is relatively insulated from the swings in the auto sector due to a large replacement market, which accounts for almost 60 percent of total demand.

But it has been hit by flat to negative vehicle sales in the past two years. Overall commercial vehicle sales fell 4.4 percent in the past year, while domestic car sales inched up a mere 0.48 percent, data from the Society of Automobile Manufacturers showed.

The production of truck and bus tyres, which accounts for nearly 70 percent of the industry's total sales by value, fell one percent by volume in May to 761,105 units.

Production of car tyres rose three percent to 646,349 and of utility vehicles rose 11 percent to 115,842.

Exports rose three percent in May over the same month a year earlier to 232,415 tyres, and by 12 percent in the first two months of 02/03 (April-March).