Car sales are expected to fall by 1.6 percent in Russia in 2014, the Association of European Businesses said, giving a central forecast of 2.73 million units within a 2.64-2.85 million range.

Last year, sales of cars and light commercial vehicles fell 5.5 percent to 2.78 million units, a reversal from three years of double-digit growth and down from 2.94 million the previous year, an AEB presentation showed.

"The year was a mixed one - a complex one - and Russia will remain in second place in Europe in terms of the volume of the auto market," Joerg Schreiber, chairman of the AEB auto association, told reporters.

Western carmakers including General Motors (>> General Motors Company), Ford (>> Ford Motor Company), Renault (>> RENAULT) and Fiat (>> Fiat SpA) have invested heavily in Russia which was on track to overtake Germany as Europe's largest car market.

"I wouldn't call 2013 a bad year. The outlook for 2014 is a little less than the 2013 result ... The majority of our members expect a more stable market and see a chance for (some) segments to grow," said Schreiber.

Auto executives, resolutely bullish that Russia's rising middle class will support sales long-term, do not predict another crisis, but are worried about an extended contraction in sales.

(Reporting by Megan Davies and Gleb Stolyarov; Writing by Maria Kiselyova; Editing by Douglas Busvine)