Carmakers gathering in Paris this week will show off the cars they hope will win them access to booming emerging markets like China, while industry watchers seek clues on how the recovery is progressing closer to home.width=356

At the last Paris Auto Show two years ago, carmakers had yet to comprehend the full scale of the crisis that would engulf the industry, forcing bankruptcies and favoring alliances as demand for new cars slumped and production plummeted.

Comments on how the still-fragile recovery is expected to progress in European markets -- now deprived of the scrapping incentive schemes that brought them back from the brink -- will be closely watched at this year's event.

Renault, which had forecast a 7-9 percent drop in the European car market this year, said this month the dip would probably be closer to 7 percent.

As much as Europe has been bailed out by scrapping programmes and 2010 has turned out to be a better year than expected, I'm afraid that's little comfort because people still feel there is something bad coming up, said Nomura automotive specialist Michael Tyndall.

Any reassurance will be welcome. I'm not convinced the manufacturers will be in a position to give it, he added.

PwC Autofacts analyst Calum Macrae said the key question is what manufacturers -- especially those who benefited most from cash-for-clunkers schemes -- will do with output. When do they start applying the brakes, if they haven't done so?

Carmakers burned by the steep fall in demand before governments stepped in with scrappage bonuses will be keen to showcase the models they hope will win them customers overseas in the emerging markets seen as a safer bet for growth.

China, which last year overtook the United States as the world's largest car market, is growing, although some see forecasts of as much as 25 percent year-on-year expansion -- to around 17 million units sold -- as overly optimistic.

France's PSA will show off the Peugeot 508 sedan for the first time, its first car conceived both for the European and Chinese markets.

It's an interesting model because its key market is deemed to be in China, said Tyndall. That, if anything, shows you where the power in the automotive industry is moving toward.


The show's other main focus will be on green technologies.

At the last Paris show carmakers spoke of their ambitious plans for electric vehicles (EVs) and hybrids designed to meet toughening emissions standards. They have now reached the moment of truth as the cars go on sale.

This will be the first auto show ever where green cars are shown not only by technical teams, but by marketing executives because these models are on sale soon, said Francois Roudier, spokesman for French carmakers' association CCFA.