Even with a sales gain of 4.4 percent in April, China's auto industry remains deeply worried. Any momentum from demand that was locked up in February and March is expected to peter out by the end of May. And the outlook for consumer spending is bleak as the coronavirus outbreak continues to hammer the global economy, including China's exports.

Zotye's financial struggles have been compounded by the coronavirus pandemic. Would-be distributor HAAH Automotive Holdings will now focus on efforts to bring another Chinese automaker, Chery, to the U.S.

The Chinese government's handling of its two most important annual political meetings in Beijing this week may offer some clues on how major auto shows will be staged in coming months. 

The Chinese automaker, which is Daimler's biggest single shareholder, plans to extend its joint-venture plans beyond mobility services and building Smart EVs, Chairman Li Shufu said.