Russian car sales slumped 12% year on year in May to 230,000 units prompting the Association of European Businesses to cut its forecast for the full year from flat to a decline of 5%.

The figures published by the AEB are an indication that a slowdown in Russia's US$2 trillion economy is intensifying. The business lobby has cut its forecast for 2013 to 2.8m units following three months of falling sales, down from the 2.94m recorded in 2012.

AEB chairman Joerg Schreiber said: "Market participants are concerned about this situation, and expect continued slow demand before a potential improvement in the second half of the year."

May’s fall was heavier than the 8% decrease seen in April and the 4% fall in March.