Sales of passenger cars and light commercial vehicles in Russia rose an annual 22% to 1.51m units in January-October on the back of scrappage incentives, the Association of European Businesses (AEB) said, predicting that demand could be 1.8m this year, up from an earlier forecast of 1.67m.

In October, sales rose 62% on the year to 188,478 units, the AEB said. In September, sales were up 55%.

Moscow has been offering 50,000 roubles (EUR1,200) since March to buyers who scrap a car that is at least ten years old and replace it with a domestically assembled new model.

The 10bn rouble programme has now been extended into next year - it was scheduled to end on 1 November.

Russia's largest car manufacturer AvtoVAZ - in which Renault has a 25% stake - sold 418,016 cars in January-October, up 40% on the year, and sales of automaker GAZ increased 24% on the year to 59,276 units in the period.

Among foreign-branded vehicles, Kia's sales increased 59% to 87,345 units; Renault's sales increased 26% to 75,158; Ford's sales dropped 1% to 69,885 and Hyundai's sales rose 18% to 69,152 units.