Volkswagen AG, the world's biggest automaker, is in talks to form a joint venture with China's Didi Chuxing to manage part of the ride-hailing company's fleet of cars and help develop "purpose-built" vehicles for Didi's services.

As part of the deal between Volkswagen and China's biggest ride-hailing service, expected to be signed early next month, the German automaker will initially manage a fleet of about 100,000 new vehicles for Didi, of which two-thirds will be Volkswagen Group cars, according to a senior executive at the carmaker.

Volkswagen will also jointly buy some new cars with Didi to allow the Chinese company to expand its fleet. The two eventually plan to collaborate to design and develop dedicated vehicles, the executive said, speaking on condition of anonymity as the details are still private.