With the deadly coronavirus outbreak keeping buyers away from showrooms, and some dealerships struggling to reopen, new-car demand plunged 92 percent during the first two weeks of February. The China Passenger Car Association warned deliveries during the month may slide by about 70 percent.

Tesla, BMW and Mercedes-Benz have also started to promote products heavily online in recent weeks as the health crisis escalates and authorities warn people to stay away from public places.

Talks are at a preliminary stage and there is no guarantee the subsidies will be extended, sources told Bloomberg. Subsidies are still set to be phased out at year's end.

Authorities in Hubei, the center of the coronavirus outbreak, have asked companies to keep operations shut through March 10, raising the risk of further supply disruptions that could hit global production.