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Sales of new cars in Russia this year are expected to rise 2.1% year on year to 1.63 million units, the Association of European Businesses (AEB) said on Thursday, following a sharp contraction in 2020 fuelled by the Covid-19 pandemic.

The forecast puts Russia's car market on course for its first year of growth in three years, despite new sales in December falling 2.1% year on year to 166,666 units, according to the AEB.

Car sales in Russia, a major market where most top brands have production lines, fell 50-70% during the April-May lockdown before a stop-start recovery.

The December contraction followed three months of growth, spurred by pent-up demand from the lockdown and the expectation of further price rises due to the weakening rouble, but analysts have warned of a sharp fall as demand wanes and prices rise.

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Sales in 2020 totalled just under 1.6 million vehicles, down 9.1% on 2019 but slightly above the group's revised forecast from September.

Thomas Staertzel, Chairman of the AEB Automobile Manufacturers Committee, said the group did not expect significant changes to the market in 2021, but that this was based on three major assumptions.

"Our forecast is based on the assumption that there will be no new lockdowns... no new restrictive foreign trade measures will be introduced against Russia, such as new sanctions, and that existing state support measures will continue," he told reporters.

This story has been published from a wire agency feed without modifications to the text.