Between 1.3m and 1.6m cars are likely to be sold in Russia this year, down from 1.4m in 2009, despite the prospect of scrappage incentives which are due to start in early March, according to a survey by PricewaterhouseCoopers.

Russia's car market plunged 56% last year after the country was hit severely by the economic downturn. PwC noted that, in monetary terms, the market slumped 61% to US$26.8 bn in 2009.

Car sales there will remain flat this year after halving in 2009, according to the Association of European Businesses (AEB) which thinks government support measures will fail to offset a lack of cheap car credit.

The AEB expects some 1.5m cars to be sold in Russia in 2010, almost unchanged from 1.47m last year, which in turn was down 49% on 2008 when the country was on its way to overtaking Germany as Europe's biggest car market.

Devaluation of the ruble has effectively closed access to cheap credit.

The Russian government plans to offer RUR50,000 ($1,700) vouchers to encourage buyers to scrap cars 10 years or older and replace them with locally made or assembled vehicles.

The government has also offered to subsidise car loan interest but the number of applications was much smaller than expected.