Minister of Economic Affairs Shih Yen-shiang declined Monday to confirm a deal between German carmaker Volkswagen and Taiwan-based Yulon Motor Co. Ltd. 'To my knowledge, the two sides have met, but I cannot disclose anything more,' Shih told reporters. Volkswagen has listed Taiwan as its priority location in looking for an overseas production base, Shih said, but the final decision is up to the two companies. The comments came after the Chinese-language Economic Daily News reported the same day that Volkswagen and Yulon, Taiwan's largest auto maker, are expected to strike a deal in which the local company would assemble cars for the German firm. The report cited sources from Swire Motors, an agent for Volkswagen in the Taiwan market, as saying that Yulon is expected to produce two Volkswagen models, including the Golf, in an initial phase. The two sides are discussing details such as assembly costs and production volume, and were likely to reach a deal by the end of November, the report said. Volkswagen plans to use the Taiwanese production base to target both the Chinese and Association of Southeast Asian Nations (ASEAN) markets, it stated. Yulon was not immediately available for comment on the report. Shih said as any investment deal between private companies was companies' confidential business information, the Ministry of Economic Affairs (MOEA) could not speak for them unless given their permission. 'The MOEA welcomes foreign investments in Taiwan, ' the minister said. 'Foreign investments are 'a good thing' for the island's economy and the ministry will do its best to provide assistance to facilitate the investments, such as finding land for factory construction.' In addition to the possible deal with Yulon, Volkswagen is looking for potential partners in Taiwan to produce auto components for the German company, the Economic Daily News said. 