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Russia is set to become the world’s 5th largest national market(Photo: Dmitry Azovtsev, wikimedia)

Russia is set to overtake Germany as Europe's biggest market this year, according to the Center of Automotive Management (CAM).

The German automotive think tank predicted that sales of passenger cars and light commercial vehicles (LCVs) in Russia will rise 20.6 pc to 3.20 million units this year, while German sales are expected to slip to 3.1 million units from 3.17 million units last year. In the first two months of the year, sales in Germany were stable compared with year-earlier levels.

CAM said Russia and the US are likely to be the growth engines for the car industry worldwide. Sales are expected to rise about 5 pc this year to 68.5 million units. "After a record 2011, the global auto industry can look at the current year with cautious optimism," said Stefan Bratzel, the head of CAM.

The think tank warned, however, that the global growth forecast could be endangered by negative developments in Europe's debt crisis, which could reduce worldwide demand for cars.

CAM expects US sales of passenger cars and light commercial vehicles to rise 9.6 pc to 14.0 million units, the highest level since 2007.

The think tank predicts a modest 3.3 pc rise in Chinese unit sales to 12.6 million. Western Europe, however, is expected to decline 5.6 pc to 12.1 million units.

-By Arjen Bongard