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Expanded sanctions may depend on new western moves, Moscow officials say (Photo: Azov/Wikimedia)

Russia may impose import restrictions on foreign-made cars if European and US sanctions are expanded further, according to a local newspaper.

The newspaper, Vedomosti, said it had been told by two government officials that Moscow could resort to such action should western countries impose tougher sanctions on Russia. The EU and the US last month imposed an array of economic sanctions on Moscow as punishment for its alleged active support of a separatist movement in eastern Ukraine and its annexation of the Krim peninsula.

One federal official was quoted as saying that expanded Russian sanctions could be imposed on foreign cars, which represent about 27 percent of the market.

The ban would not affect imports of foreign components, which are needed by domestic as well as foreign carmakers. Foreign brands building cars in Russia also would not be affected. Many of the world's major carmakers have established car plants in Russia in the past decade.

Sales of new passenger cars and light commercial vehicles dropped 22.9 pc in July from year-earlier levels to 53,598 units, as buyers worried about the impact of Ukraine tensions and western sanctions.

According to the Association of European Businesses (AEB) a lobbying group, sales plunged 9.9 pc in the first seven months of the year.

"The contraction of the automotive market continues, picking up speed in July," said Joerg Schreiber, chairman of the AEB Automobile Manufacturers Committee. "The overall trend is worrisome and unlikely to improve fundamentally any time soon."