The Russian new car market broke through the 2m unit barrier for the first time in 2007 as 2.35m new cars were registered, making it the fourth largest in Europe, behind Germany, Italy and the UK.

According to automotive forecasting company, RLPolk, Russia is set to overtake all of these countries and become Europe's largest car market by 2010.

As recently as 2002, Russian accounted for around 1m units but grew 140% in five years. It is forecast to grow a further 60% in the next three years to over 3.7m units.

"This is a level that is impossible to be reached in any other European country, even in Germany," chief analyst Ulrich Winzen said in a statement.

Lada's dominance is long over. In 2002 around 70% of cars sold in Russia were produced by domestic manufacturers. In 2007 the figure had fallen to just 27%. Winzen said this was similar to the share that Fiat now has in Italy.

Some vehicle manufacturers now sell more cars in Russia than in any other European country. Russia is now the largest European market for Toyota (and the only 'European' market in which it sells the Camry, which is locally assembled), Nissan, Mitsubishi, Hyundai and Kia, plus Chevrolet.

Polk forecast this trend would continue. By 2010 it expects more than 80% of all new registrations to be made by foreign brands.

"Despite stagnating sales in traditional car markets, German and European car production will profit from growing demand in Russia," added Winzen.