A media report suggested up to 1.3m German car owners would accept rebates of as much as EUR10,000 (US$11,700) per car from Volkswagen, Daimler and BMW in a cash grab reminiscent of the government's 2009 cash-for-clunkers programme.
Bloomberg said that would boost demand but could still leave over 5m diesel cars with outdated emissions systems on German roads.
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Automakers, also including Ford, are targeting rebates at drivers of diesel cars delivered before the end of 2010, which currently number about 6.4m vehicles in Germany.
Intended to encourage purchases of cars meeting the latest pollution regulations, the incentives are the result of an agreement with the government last week aimed at preventing a crackdown on the fuel.
As many as 20% of owners of vehicles complying with now-outdated Euro 1 to Euro 4 emissions standards could take up the carmakers' offer, consulting firm Oliver Wyman reckons.
"This rebate program is an important element in the plan to get older polluting cars off the road and improve diesel's image," August Joas, head of Oliver Wyman's global automotive practice, told Bloomberg. "The cars eligible for the rebate will be quite old. So for people considering the programme, the jump to buying a new vehicle will still be significant."
Demand for the diesels in Germany has only narrowed rather than collapsed since VW's 'dieselgate' and the cars accounted for 41% of total car sales in July, compared with 46% for all of last year. Institutional buyers including corporate, government and rental fleet operators, which make up two-thirds of Germany's annual car demand, have been slow to react to the barrage of criticism facing the technology.
"We do notice that our fleet customers are considering which type of engine is best amid the current discussion on emissions manipulation and driving bans," Sixt Leasing SE spokesman Stefan Kraus told Bloomberg. "But because of the low cost of ownership of diesel cars and great mileage, the majority of orders remains for diesel engines."
Automakers will bear the cost of the incentives, with Volkswagen affected by EUR400m to EUR1.2b, according to research company Evercore ISI. At the same time, the program is set to help carmakers' bottom line by boosting demand for pricey new models.
Bloomberg said trade-ins of just under 1.3m cars would equate to 38% of last year's 3.35m new car sales in Germany. That makes the latest diesel plan similar league to a government-paid cash-for-clunkers programme in 2009 when a rebate of EUR2,500 prompted owners of 2m cars nine years or older to turn them in and buy new vehicles. That incentive ended once spending reached EUR5bn.
