Germany's Continental AG said on Wednesday its India arm plans to invest over 50

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million euros to expand tyre capacity in the world's second fastest growing major auto market.

Continental, the world's fourth largest tyre maker with reported sales of 26 billion euros ($37.5 billion) in 2010, plans to start production of radial tyres for passenger cars and commercial vehicles in the second half of 2013 as well as increase capacity in an existing unit, it said.

"In India, there is a rising demand for vehicles with high quality tyres as well as premium technology," Nikolai Setzer, head of Continental's tyre division said.

"Thus, we are convinced that radialisation will be the driving force in the Indian truck tyre market," Setzar said.

Continental, which in July acquired India's Modi Rubber's tyre making unit for about $30.11 million, also plans to ramp up operations in the unit's Modipuram plant.

The firm plans to double bias truck and bus tyre capacity from this plant to more than one million units in 2013.

Continental India plans to increase its headcount by more than a third from the current 1,600 to 2,200-2,400 within the next few years, it added.