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CEO Herbert Diess speaks ahead of Volkswagen Group's annual general meeting in Berlin on May 14, 2019.

Hannibal Hanschke/Reuters

Volkswagen AG and Ford Motor Co. are close to reaching a deal on a partnership for developing self-driving cars, the German car maker’s chief executive said on Thursday.

Volkswagen and the No. 2 U.S. automaker signed a deal in March to develop a pickup truck and have been in talks about extending the alliance to include autonomous driving and mobility services.

The talks are “going well and are nearly complete,” VW chief executive officer Herbert Diess told some 500 of the company’s top managers from around the world gathered at its headquarters in the German town of Wolfsburg.

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Ford said talks are continuing and that it would share updates when details became firm.

“Discussions have been productive across a number of areas,” a spokeswoman said in an e-mailed statement.

Car makers are increasingly looking to partnerships and alliances to help share the cost of moving to new, cleaner technologies, potentially saving billions of dollars in costs.

Volkswagen, navigating global trade conflicts, views its relationship with Ford as strategically important to help balance its regional interests.

“Today we are de facto a very Chinese-oriented company. For this we need a counterweight in the U.S.,” Diess said, according to prepared remarks seen by Reuters.

Earlier this week, Volkswagen said it had ended its partnership with self-driving car software firm Aurora Innovation Inc.

The dissolution of the partnership came after Aurora said it would build autonomous platforms for commercial vehicles with Fiat Chrysler Automobiles NV.

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Ford’s majority-owned subsidiary Argo AI is building an automated “driver” that could compete with Aurora’s technology.

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