BERLIN -- BMW, Daimler and Volkswagen Group agreed to to update the engine software of more than 5 million newer diesel cars in Germany to curb NOx emissions. They will also offer trade-in rebates on older models that cannot be updated.
The deal avoids more costly remedies in a bid to salvage diesel technology and avoid driving bans in German cities.
The recalls will cost about 500 million euros ($593 million) and largely sticks to commitments that the automakers had already made.
The deal allows the companies to avoid costly mechanical modifications to engine and exhaust systems. About half the fixes have already been carried out as part of Volkswagen Group's response to its cheating scandal.
The aim of the fixes to Euro 5 cars and some Euro 6 models is to cut NOx emissions by 25 percent to 30 percent on average, the VDA industry lobby said.
In addition, the costs of paying car owners incentives for trading in their older diesel cars for new models will far exceed 500 million euros for the three carmakers, the VDA said. The incentives are aimed at encouraging consumers to trade in older diesel cars that cannot be improved with software updates.
While overall details of the scrappage plan were unavailable, BMW outlined plans to offer 2,000-euro trade-in bonuses.
The deal came at a so-called "diesel summit" in Berlin on Wednesday between industry executives and automaker executives.
Chancellor Angela Merkel's government has come under mounting pressure for not doing enough to crack down on vehicle pollution and for being too close to powerful automakers. The issue has become a central campaign topic ahead of next month's national election, prompting the government to summon car bosses to try to avert moves in some cities to force bans on diesel vehicles.
"I understand that many people think that the German car industry is the problem," Daimler CEO Dieter Zetsche said in an emailed statement. "It’s our job to make clear that we’re part of the solution.