Volkswagen AG is nearing a deal to work with Ford Motor Co. on electric-car technology and self-driving vehicles, according to Chief Executive Officer Herbert Diess.

Talks with Ford are “progressing well” and are close to being finalized, Diess said at a gathering of the carmaker’s 500 most senior executives in Wolfsburg, Germany.

The deal will help the two companies save costs to counter slower sales and record spending requirements to develop new technologies such as battery vehicles. VW will also get a greater footprint to the U.S. market, as the company is facing a downturn in China, the manufacturer’s largest sales region, amid rising trade tensions and tightening rules on vehicle emissions.

VW’s deal wilth Ford will probably include an investment in the U.S. company’s autonomous affiliate Argo AI, and a deal could be announced next month.

"Rivals" Daimler AG and BMW AG have also teamed up on car sharing and autonomous driving.