Volkswagen mulls extending diesel incentives across Germany

German carmaker Volkswagen is examining whether to extend trade-in incentives to owners of older vehicles in all of Germany, extending the program beyond the 15 most heavily polluted cities, a spokesman said on Friday.

Under pressure to avert bans of diesel vehicles in key cities, carmakers have started offering trade-in incentives to encourage customers to scrap older diesel vehicles for more modern cleaner vehicles.

A spokesman said the responsible board committee is examining a nationwide trade-in incentive for Euro 4 or Euro 5 diesel vehicles for a limited time period and is expected to make a decision early next week.

Volkswagen said in October it will offer buyers of VW-branded passenger cars an incentive if they agree to scrap cars equipped with older Euro 1 to Euro 4 engines.

The trade-in incentive is currently limited to Germany's 15 most polluted cities.

German daily Bild first reported that VW was considering extending the trade-in incentive to all of Germany. The paper said details were still being worked out but the company would pay up to 9,000 euros ($10,200) per car as previously envisaged.

German carmakers have already agreed to spend up to 3,000 euros ($3,431) per vehicle to upgrade engine management software to make exhaust filtering systems more effective, but environmentalists say these measures are insufficient.