The Russian light vehicle market is facing a “perfect storm” of macroeconomic factors that will continue to place significant downward pressure on sales in the short-term, according to an analyst at IHS Automotive.

In a research note, analyst Tim Urquhart says that by far the most pressing of these factors is the chaos caused by the devaluation of the rouble which has lost around half its value against the US dollar since this time last year.

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“This has put massive pressure on vehicle pricing and the acceleration on the fall in the value of the rouble which occurred in December last year has led to round after round of price increases in January,” he points out. This widely anticipated price effect resulted in a pull-forward of purchases at the end of 2014, as savvy customers used the Russian government’s scrappage scheme to buy outgoing 2014 models cheaply before price increases were applied to 2015 models.

However, Urquhart believes that the severe problems faced by Russia’s economy will now lead to an accelerated market decline, despite the extension of the scrappage scheme.

The Russian economy, Urquhart maintains, faces a “perfect storm” of rising prices, declining spending power, eroded confidence and the economic effect of [Ukraine related] sanctions on the Russian government.

IHS Automotive forecasts that Russian light vehicle sales will fall by 27.4% year-on-year in 2015 to 1.81m units. “Such rapid changes in the forecast outlook will cause havoc for foreign OEMs who had previously targeted Russia as a source of growth potential,” Urquhart warns.

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In January, light vehicle sales in Russia declined by almost a quarter on the previous year.