Yulon Motor shares jumped 3.2% yesterday after a newspaper reported that the Yulon group was likely to assemble and sell cars for China's Geely Motor in Taiwan by the end of the year.

Yulon and Geely will also jointly develop electric vehicles the Taipei-based Economic Daily News reported this week, citing unnamed sources.

Yulon Chief Executive Kenneth Yen and Geely Chairman Li Shufu will sign an agreement on the cooperation when Li visits Taiwan next month, the report said.

Chinese firms are taking much more interest in working with Taiwanese firms as political relations between China and Taiwan have thawed in recent years. They also eye cheap access to superior Taiwanese technology in return for future access to mainland China's market for Taiwanese companies.