German car-makers fight for diesel's life

Germany's car industry has joined forces to help save the future of diesel-powered vehicles by offering the government a quick fix that will cut NOx emissions from more than five million vehicles.

Addressing fears of forthcoming city bans all over Germany, Daimler, BMW, Volkswagen Group and Opel have reportedly approached the German government with a software upgrade that's said to reduce smog-inducing NOx emissions by 25 to 35 per cent.

According to the car-makers, the reduction in emissions from the software tweak would reduce total pollution to the same extent as banning diesels from major German cities, like Stuttgart.

The software update, described as an ECU 'patch', has been created to update both Euro5 and early-Euro6 vehicles.

Now a national issue, Germany's car industry -- which employs 20 per cent of the nation's workforce -- is already under pressure from the government to help consumers switch from diesel to perceived cleaner alternatives.

Transport minister Alexander Dobrindt has already suggested in public that the industry should introduce financial incentives to persuade consumers to trade-in diesel cars that are 10 years old or older.

German car-makers have already lobbied hard to prevent bans and, for now, have won support from a government that has said it will do all it can to stop local councils banning diesels from cities and town centres, but with a national election looming and anti-diesel sentiment growing among voters the car industry is worried.

"Our goal is to improve diesel rather than ban it," announced Daimler CEO Dieter Zetsche following a meeting with government officials on Wednesday.

BMW, meanwhile in a separate announcement, has seized the opportunity to benefit from the public debate by offering owners of Euro 4 or older diesels a €2000 ($A3000) bonus on their trade-in if they buy an i3, plug-in hybrid or Euro6 vehicle.

BMW's trade-in deal, which begins this month, is said to last until the end of the year.

Until the Dieselgate emissions crisis in 2015 the German government, like many in other European countries, heavily backed diesel as the most effective way to help car-maker's meet their CO2 reduction obligations.

This included incentivising the purchase of diesel-powered cars by make the fuel cheaper than petrol at the pump.

It's been reported the drive for diesel was a huge success with more than 15 million diesels bought by consumers.

Year-on-year diesel sales are down 12.7 per cent in Germany, with the market share dropping from 46 per cent at the end of last year to around 40.5 per cent in July.