Russia has increased import taxes on new cars to 30% from 25%.

According to a local paper, prime minister Vladimir Putin has signed a law accordingly. German press agency dpa said the increased tax was intended to make it less financially attractive to import cars.

Taxes on imported used cars have also been increased.

According to dpa, the measures were agreed in November and are intended to encourage vehicle manufacturers to shift production to Russia.

Sales by foreign vehicle manufacturers fell 15% year on year in November - the first monthly decline for more than four years. This was despite discounts of up to 20% off retail prices.

Many manufacturers already produce in Russia. Hyundai, which does have a Russian plant, was among the worst hit, with sales down 36% on a year ago.

Russia has not escaped the global credit crisis. Access to car loans has been reduced, stifling demand. In the first 11 months of 2008, foreign brand car sales were up 31% year on year.