Paris Motor Show highlights EM speed bumps

The 2014 Paris Motor Show kicks off this week amid ongoing uncertainty for Europe's top carmakers. New car sales rose just 2.1 percent in Europe in August, according to the Association of European Automobile Manufacturers – below expectations – as weak consumer sentiment threatens to derail the region's fragile economic recovery.

IHS Automotive analysts expect car sales across the EU to rise just 5 percent in 2014, to 12.5 million units - nearly 19 percent below pre-recession levels.

In recent years, manufacturers have tried to offset sluggish European sales by turning to emerging markets, but there are concerns that political storm clouds are gathering over these traditionally high-growth havens.

163169092HC00130_2013_Genev
Harold Cunningham/Stringer | Getty Images News | Getty Images

The crisis in eastern Ukraine – and subsequent Western sanctions against Moscow - has prompted Volkswagen, GM's Opel and Ford to scale back production in Russia. New car sales sank by almost 26 percent in the country during August, according to the Association of European Businesses - the fastest rate of decline so far this year.

Speaking to CNBC on the eve of the Paris Motor Show, BMW board member Ian Robertson said slipping sales were also due to Russia's economic woes, separate from Ukraine. But he sounded confident that growth in other parts of the world - such as the U.S. and China - would offset weakness in Russia.

However, IHS warned that China's robust car sales were set to slow next year, with growth of around 8 percent, compared to 11.2 percent this year. BMW's Robertson said this was merely a "normalization" of the world's largest car market.

But European carmakers are also battling an antitrust investigation in China, with government officials scrutinizing the amount foreign companies charge for their cars and parts. BMW joined Volkswagen's Audi and Daimler's Mercedes Benz last month in vowing to cut prices on certain car parts to appease regulators.

In Brazil, meanwhile, there are just days to go before the first round of the highly-anticipated general election, and manufacturers are on high alert for any further uncertainty in the crucial LatAm market. Brazilian auto sales slumped 17.2 percent from a year earlier in August, according to the carmaker association Anfavea. This came despite a program of tax incentives from current President Dilma Rousseff's government.

So where does this leave investors hoping for direction from the Paris Motor Show? Pretty much back at square one, according to ISI Group's Arndt Ellinghorst. "We are not expecting material moves in either direction this week. We believe the market needs to see Q3 earnings in order to regain confidence," he told CNBC.

—By CNBC's Nancy Hulgrave