Electric carmaker Tesla is facing a backlash in China just as local competitors seek to challenge the US-based company's share of the Asian giant's market.

China's market watchdog agency and its consumer protection agency issued statements Wednesday referencing an incident at the Shanghai Auto Show that went viral on Chinese social media.

At the show a woman climbed on top of a car Monday and yelled that she was almost killed when the brakes on her Tesla failed. She wore a t-shirt emblazoned with the Tesla logo and the words "brake failure".

The woman was eventually wrestled to the ground by plain clothes security guards, but not before several onlookers as well as a reporter from state-affiliated Global Times took video of the incident and posted it online.

Shanghai police jailed the woman for five days for disrupting the peace, but her message nevertheless gained traction.

"A Tesla owner who recently defended her rights at the Shanghai Auto Show has aroused widespread concern," China's market watchdog agency said in a statement.

The agency said it "attaches great importance to that", adding that it instructed local officials "to protect the legitimate rights and interests of consumers in accordance with the law".

The office emphasised that companies "should effectively fulfill their main responsibility for quality and safety."

The China Consumers Association also joined the backlash, stating that it is "highly concerned" about the incident.

"In the face of consumer complaints, companies must listen carefully, negotiate sincerely, and give consumers reasonable explanations and effective solutions", the group said.

Tesla said Tuesday that it would address any problem with its vehicles in a statement on Chinese social media platform Weibo -- but would not meet unreasonable customer demands.

State news service Xinhua published an opinion piece blasting the statement for its alleged "lack basic sincerity".

The car company later issued a second, more conciliatory statement on Weibo.

Elon Musk's company is the highest-selling EV brand globally and in China. The company built its third factory for electric vehicle in Shanghai in 2019 and is already selling one-fourth of its output in China.

The complaints come as Chinese firms including smartphone giants Huawei and Xiaomi, e-commerce leader Alibaba, and even DJI, the world's top drone manufacturer, are entering the electric vehicle market.

China is the world's biggest and most rapidly electrifying auto market. The government expects new-energy vehicles to comprise 25 percent of car sales by 2025.

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