China’s ministry of finance in September reaffirmed the agency’s schedule to phase out subsidies for electrified vehicles at the end of 2020. But remarks by a top official at the nation’s leading auto regulator this month imply the government now is bowing to industry pressure and market realities and leaning toward pushing the deadline back. 

With Chinese-built light vehicles still subject to stiff U.S. tariffs and the market expected to contract for a third straight year in 2020, automakers operating well below production capacity are stepping up efforts to ship cars and light trucks to regions other than North America.

The U.S. trade war has sapped the Chinese economy, dampened local vehicle demand and rendered global automakers unable to export China-built vehicles to the United States. But it has worked in favor of Tesla Inc. 

China’s new-vehicle market is set to contract for the second straight year, but there was no trace of a chill at Automechanika Shanghai, the country’s largest annual trade fair for spare auto parts. Behind the record-breaking turnout are more business opportunities in the aftermarket space for parts and service providers as the country's vehicle fleet grows and ages.