The combined effect of the sanctions and the sharp drop in oil revenue led to a loss of confidence in the ruble. Moscow's attempts to defend the currency practically depleted the country's foreign exchange reserves overnight. Eventually, policymakers gave up and let the currency float freely months later. The ruble subsequently collapsed in December 2014, triggering double-digit inflation rates as imports became more expensive while GDP shrank 3.5 percent in 2015. Russia's auto market went into shock, plunging 36 percent that year.
"We raised our prices when the ruble fell, but despite that, we're still earning rather low margins," Volvo's Samuelsson said. "The problem with Russia was the value with the currency."
Russia's short-term outlook has strengthened somewhat. For the first time in 15 years, the country took part in landmark output cuts agreed to by the Organization for Petroleum Exporting Countries in an effort to boost the price of crude oil. Russia, which is not an OPEC member, had initially resisted before deciding two months ago to cut output in the first half of this year by up to 300,000 barrels a day, or roughly a quarter of the size agreed to by OPEC. While this means less revenue upfront, prices for benchmark Brent crude futures surged nearly 9 percent on the news.
"The ruble is showing that the economy, and trust in the economy, is coming back. I think the increasing oil price is helping that," Robertson said. "We think the premium market has a capability, in due time, to be significantly higher -- multiple times higher. But we shouldn't underestimate the political situation. Therefore, I would be cautious that it would consistently move in one direction."
In recent weeks U.S.-Russia political tensions had heightened after the Obama administration accused Moscow of dumping a series of hacked emails that put a negative light on Hillary Clinton's presidential campaign. The icy relations with Washington may thaw quickly as President Donald Trump shares an anti-terror policy agenda with Moscow. He also discussed rolling back Russia's economic sanctions before taking office.
Barring further external shocks, automakers such as Kia, Volvo and BMW are hopeful that they will see an improvement in their Russian businesses.
Volvo expects a boost from the arrival of its new-generation XC60 SUV while BMW is counting on a lift from the revised 5-series sedan. When asked whether BMW's sales in Russia would soon surpass Mercedes, which had a near 10,000-unit advantage last year, Robertson said: "We have concentrated our efforts on larger cars rather than a full-range offering. But we'll revisit this strategy in the months to come."
Since financing a car in Russia is costly, automakers believe artificial crutches remain necessary. Many car buyers that purchased during the boom five years ago may be looking for a new vehicle, but interest rates are far higher than in the rest of the world. Russia's Central Bank held its main policy rate at 10 percent in mid-December, down from 17 percent at the start of 2015, continuing its crackdown on runaway inflation.