MOSCOW: International carmakers are taking stock of a declining Russian car market and assessing their $10bn investment in capacity-building, although several analysts and industry insiders remain confident that the long-term trend is positive.

Russian car sales fell 6% in the first six months of this year and discounting is on the rise as dealers seek to move unsold stock. There are also concerns about a weak supplier base, volatile swings in demand and high logistical costs.

Some carmakers are concerned that Russia may witness a similar crash to the one it experienced in 2009 that halved sales to 1.5m.

John Stech, president of Volvo Russia, told Automotive News Europe that there are similar indications to 2009. "The ruble is getting weak and car loan interest rates are going up. It creates anxiety among Russian buyers," he said.

And Bo Andersson, of Russian carmaker GAZ, warned that the sub-compact and compact segments, such as the Ford Focus, are experiencing a real slowdown.

Up to ten major global vehicle groups have committed $10bn to manufacturing by 2020, including Renault-Nissan's $750m investment in AvtoVAZ that aims to increase capacity for the combined group to almost 1m cars a year.

With so much at stake, the slowdown is causing some carmakers to reassess their strategies.

Ted Cannis, CEO of Ford's Russian joint venture, said: "Some people are holding back with decisions right now because they can't quite see as far ahead into the future as they could before."

Although he added that any spare capacity would get used up quickly if the market resumes its previous growth.

However, several observers remain cautiously upbeat. Boston Consulting, the management consultancy, estimates capacity will increase to 3.3m by 2016 from 2.3m in 2012.

It also expects the market to grow at an average 6% annually to 2020, making Russia the fifth largest car market in the world with forecasted sales of 4.4m units.

Michael Gartside, an analyst at PwC, the professional services firm, predicted continued growth for premium brands, especially because of strong demand for SUVs.

Meanwhile, Carlos Ghosn, CEO of Renault-Nissan, has spoken publicly about his confidence. He told newspaper Vedomosti last month that "there may be quarterly or even yearly falls in sales, but on the whole I have no doubt that the trend is upward".

Data sourced from Automotive News Europe; additional content by Warc staff