The decline in May almost exactly matched the year-to-date (YTD) fall in the first five months of the year, of 37.7% y/y to 641,933 units.

IHS Automotive Principal Analyst, Tim Urquhart said that in terms of the brand and model level sales, the most interesting development was that the Hyundai Solaris returned to the top of the sales charts after holding the position briefly in January. The Kia Rio and then the Solaris have both briefly knocked the Lada Granta off the top spot in the last six months, which shows the changing shape of the Russian market and the difficulties that Lada is suffering despite market incentives in theory favouring the Russian OEM.

The Solaris sold 10,654 units in May, up from 9,791 units at the same point last year as the model was one of the main beneficiaries of the Russian government's subsidised loan scheme, which offers loans at one-third of the base rate on automotive purchases on approved cars made in Russia.

The Granta was the second-hand best-selling model in October with sales of 8,471 units, which was a hugely accelerated decline on the figure of 12,947 units that it posted in May 2014.

The third best-selling model was the Kia Rio, which sold 7,460 units in comparison to 1,813 units last year, significantly outperforming the overall market. The locally built Nissan X-Trail posted the biggest uplift in terms of growth in May; it tripled sales to 3,608 units, as a result of also being subject to loan subsidy programme. As a mid-sized and comparatively affordable sport utility vehicle (SUV), the X-Trail makes a compelling purchase at the moment in Russia and it was testament to its performance that it was the fifth best-selling model overall in Russia in May.

In brand terms Lada retained the top sport and outperformed the overall market with a 33% y/y decline to 22,857 units, which contributed to a 30% y/y decline in the first five months to 162,694 units. Hyundai and Kia again outperformed the market significantly with falls in May of 13% and 27% respectively. However, the next placed Renault, Nissan, Toyota and VW all underperformed the wider market during the month with falls of between 38% and 48%.

Commenting on the outlook for the market, Tim Urquhart of IHS added: “It was thought by some analysts that the Russian light-vehicle market would begin to show abatement in the rate of decline in May, although this failed to transpire. The fact that the market still recorded a decline during the month of 37.6% y/y when the Russian government is still running both the vehicle scrappage programme concurrently with the recently introduced loan subsidy for automotive purchases will be worrying for dealers and OEMs operating in Russia. Despite some signs of a more positive environment in the medium term and an increase in the value of the rouble between January and mid-May, it has been declining again since the start of May. The rate recovered from RUB69.5:USD1 at the end of January to RUB50:USD1 in mid-April, although it has now fallen back to RUB55.9:USD1. While the Russian government is trying to invigorate the market with various stimulus measures, the underlying macro environment remains highly challenging and appears unable to support organic market growth. IHS Automotive current forecasts 1.59 million units as a result of the ongoing accelerated declines, which is in line with the YTD decline at 37.2% y/y.”