BEIJING - German automaker Volkswagen is preparing to expand financial services in China to tap new business opportunities in after-sales services, car rentals and electric vehicles.

Its wholly owned subsidiary, Volkswagen Financial Services AG, recently founded an investment company in Beijing after receiving the required government approval.

The newly established Volkswagen New Mobility Service Investment Co will "focus on building automobile-related service business along the group's value-added chain", it said in a statement last week.

Targeted investment areas include long and short-term rentals, after-sales business and "alternative mobility solutions like e-mobility services", the company said.

"Innovative mobility solutions as demanded by individual and corporate customers will add value to the market," said Reinhard Fleger, China/India & ASEAN regional manager at Volkswagen Financial Services and board chairman of the new company.

"The China market is ready for modern forms of mobility. This is true for urban customers as well as for small and large corporations," said Peter Tempich, the company's general manager.

The company didn't elaborate on how its business will work, saying it is still in the process of research and preparation.

Volkswagen Financial Services have offered both retail and wholesale automotive financing in the Chinese market since 2004, when its wholly owned subsidiary Volkswagen Finance (China) was set up in the capital city.

The company now has a financing penetration rate of about 15 percent for its cars sold in China. It has set a target of 50 percent in 2018, which means by then one of every two of its vehicles sold in China would be purchased with the help of Volkswagen Financial Services.

The leading foreign carmaker in China sold 2.26 million vehicles in the country last year, up about 18 percent over a year earlier.