Shares in Volkswagen soared for a second day on Thursday amid speculation that a large investor was building up a stake in the German automaker, The Associated Press (AP) reported.

Volkswagen shares were up 3.5% at €49.79 ($US60.78) by early afternoon on the Frankfurt stock exchange, their highest level in at least three years, adding to gains the day before, the report said.

Albrecht Denninghoff, an analyst at HVB bank in Munich, told the news agency the increase was powered by talk that US billionaire Kirk Kerkorian or an unidentified Arabian investor was buying the stock.

“There are rumours that a big investor is moving in,” Denninghoff reportedly said.

According to the Associated Press, Tracinda said on Wednesday it plans to boost its 9.5% stake in General Motors and may approach the world’s biggest automaker about getting representation on its board.

AP noted that Kerkorian, a large Chrysler investor, also unsuccessfully sued DaimlerChrysler over the terms of the 1998 deal that married Daimler-Benz with the US automaker.

Denninghoff told AP investors would watch VW’s upcoming decision on whether to build a planned new SUV in Germany or Portugal to see if it succeeds in negotiating cheaper labour costs.

Volkswagen has recently denied rumours that it was considering closing down its Seat unit or planning to buy back some of its own shares, the Associated Press added.