Volkswagen and Didi collaborating on ride-sharing service in China

German car-maker Volkswagen has announced it is entering talks with Didi Chuxing of China in order to set up a high-end ride-hailing service in the country.

Volkswagen also announced further ambitious sales goals in order to consolidate its standing as one of the biggest car producers in China, as it battles it out with General Motors for market share in the country.

Automakers and tech companies have been preparing for further advances in car technology, with GM and Toyota having announced similar collaborations with Lyft and Uber, respectively, in the last year.

Few more details were released by Volkswagen about the talks, but it did say that it was increasing its focus on the Chinese market, with a particular focus on low-emission and electric vehicles.

"We have to do more in the NEV area. The government is pushing, the general environment in China is pushing that," Jochem Heizmann, chief of Volkswagen's operations in China, told reporters before the Guangzhou auto show.

The German company has been under pressure to show a commitment to cleaner energy vehicles following a scandal last year in which it admitted to fitting millions of vehicles with emission cheating devices.

Didi recently came out in top in a competition battle with global rival Uber in China, and agreed to buy the US company's operations in the region, bringing to end an intense price war which was damaging both entities' profits.