SAIC Motor Corp Monday said it has no plan to form a three-way venture with Volkswagen and Japan's Suzuki Motor Corp in China although the two overseas auto makers formed a strategic partnership.

The comment came after an Economic Observer report said Suzuki plans to buy into Shanghai Volkswagen, the flagship venture between VW and SAIC, to speed up expansion in China.

The report, citing an official from Suzuki's Chinese partner Changan Auto Group, said the three companies were discussing the matter but that no specifics were available.

Suzuki, which is 20 percent owned by VW, has been eying new partnerships to expand in the world's largest auto market. Volkswagen bought into Suzuki for US$2.5 billion in December with aims to leverage its small-car expertise to help it become the world's No. 1 auto maker.

A statement from Suzuki Motor yesterday said the report was groundless while a public relations official from Volkswagen Group China said he was not aware of the matter.

"The tie-up between Volkswagen and Suzuki focuses on other markets outside of China," said independent auto analyst Zhong Shi, who added the three-way venture is not likely.

"VW is very much focusing on its own products in China while the subcompact car category, Suzuki's strength, is not big in China," he added.

Suzuki entered China in 1993 and has developed slowly here. It has blamed a weak partnership and lack of understanding of market demand.

Last year, its sales reached 250,000 units in China after selling less than 200,000 units in 2008.

In March, Suzuki moved its office from Beijing to Shanghai's Anting Town in Jiading District, which is also home to two Shanghai Volkswagen plants and its headquarters.

Another analyst said Suzuki can now seek a second partner in China after Jiangxi Changhe Auto was merged last year into Changan Auto during an industrial reshuffle.