Newly released figures from the Association of European Businesses (AEB) show that sales of new passenger cars and LCVs in Russia decreased by 24.4% last month.

This followed growth of 2% in December 2014 on a number of factors, including something of a pull-forward effect, according to IHS. The other event of particular note to hit the Russian market was that for only the second time in history a foreign car was the best-seller during the month, with the Hyundai Solaris taking the position after the Kia Rio was the best-seller in November.

On a brand-by-brand basis, Russia's perennial market leader the Lada nameplate suffered a dreadful January, with sales falling by 26% y/y to 17,492 units, a performance that was worse than the overall decline in the market. The company's biggest faller in terms of sales volume was the Kalina which fell 1,738 units to 2,526 units. However, the Granta performed significantly better to post sales of 7,737 units and take second spot, with a sales number for the month which was only down 518 units from last year.

The Solaris, which rose substantially in January, helped Hyundai generate an overall growth figure of 15% y/y to 12,707 units. The other strong selling vehicle in the Hyundai range in January was the ix35. Kia was the third best-selling brand, managing to generate a positive uplift of 1% y/y to 11,346 units, with the Rio the third best-seller overall with its tally of 5,147 units almost matching the figure it generated last year.

Nissan and Renault were the fourth and fifth best-selling brands in January with sales falling by 18% y/y to 9,101 units and 32% y/y and 8,809 units respectively. Renault's particularly dire performance was down to the collapse of Duster sales which more than halved y/y, with sales of 2,743 units.

In response, IHS Automotive said: ‘The Russian light-vehicle market is currently facing a "perfect storm" of macroeconomic factors that will continue to place significant downward pressure on sales in the short-term. By far the most pressing of these factors is the chaos caused by the devaluation of the rouble which has lost around half its value against the US dollar since this time last year. This has put massive pressure on vehicle pricing and the acceleration on the fall in the value of the rouble which occurred in December last year has led to round after round of price increases in January.

‘It seems that something of a pull-forward effect was created as the end of 2014, as savvy customers used the Russian government's scrappage scheme to buy outgoing 2014 models cheaply before price increases were applied to 2015 models. In addition, despite the Russian government now having extended its scrappage scheme into 2015, the macro-economic conditions do not provide the environment for the mechanism any ability to move the dial in terms of the market's performance.’

This weakness will lead to an even more accelerated decline on the 10% y/y fall posted in 2014, according to IHS Automotive, as a result of the market volatility and rapid macroeconomic changes. IHS Automotive forecasts that the Russian light-vehicle sales will fall by 27.4% y/y in 2015 to 1.81 million units. Such rapid changes in the forecast outlook will cause havoc for foreign OEMs who had previously targeted Russia as a source of growth potential.