It is part of the company’s shift toward electric vehicles, self-driving cars and new digital business models. The company outlined a restructuring in June, vowing to boost profit and push aggressively into electric vehicles and new technology services, as it struggled to get rid of the impact of the U.S. emissions-cheating scandal.

The German auto maker said it is in talks with Didi Chuxing to set up a ride-hailing joint venture. Didi Chuxing hosts 20 million rides a day in 400 Chinese cities. In August Didi acquired Uber’s China operations after a price war.

In addition, Volkswagen said it has agreed to explore a strategic partnership with Shouqi Group Co., a Beijing-based car-leasing company, and is discussing a potential collaboration with Chinese auto partners FAW Group Corp. and SAIC Motor Corp. in the used-car market.

Volkswagen said the talks are an important step in the company’s move toward becoming a mobility-services provider. "To reach this goal we will forge cooperation with strong partners from different sectors of the trendsetting mobility services in China,” said Jochem Heizmann, chief executive of Volkswagen China.

The company also said Thursday that by 2025 it aims to deliver 1.5 million alternative-energy vehicles a year in China. Most of those will be electric.

Globally, auto makers have been stepping up investment in mobility services as they see the auto market changing. Car companies are trying to fight the encroachment on their market from Alphabet Inc.’s Google, Uber and others.

In May, Volkswagen invested $300 million in the Tel Aviv-based car-hailing startup Gett, whose on-demand-taxi mobile app and service is available in 60 cities in Israel, Russia, the U.S. and the U.K. The investment followed General Motors Co.’s $500 million investment in Lyft Inc. in January.

—Rose Yu

Source: THE WALL STREET JOURNAL