VW counters German city bans with diesel buyback promise as dealers struggle to sell

3 April 2018

Diesel is a hot topic in Germany at present, with the implementation of driving bans for diesel vehicles in cities imminent. Manufacturers still back the technology, in which they have invested millions over the years, and are coming up with ways to instil consumer confidence in any new purchases.

In addition to current scrappage schemes, trading in older diesel models for new, cleaner vehicles, carmakers need to ensure drivers affected by driving bans, forced on the cities of Stuttgart and Dusseldorf after a court ruling with others potentially the following suit, are catered for. Volkswagen has now launched a scheme to keep customers safe in such a scenario.

The company’s diesel buyback scheme applies to new and one-year-old diesels bought after 1 April 2018. It is valid for three years from the date of purchase and offers customers who would be affected by possible driving restrictions at their home or work address the opportunity to exchange vehicles. The affected customer will receive an offer that the participating Volkswagen dealership will buy back the original model for the current value determined by the independent institution, Deutsche Automobil Treuhand (DAT, German Automobile Trust), if the customer then buys from the same dealership a new or year-old vehicle which would not be affected by driving restrictions.

Thomas Zahn, head of sales and marketing Germany of the Volkswagen brand says, ′Volkswagen is committed to diesel, and our current engines are among the cleanest on the market. With the Germany Guarantee and the diesel environmental incentive, we are offering our customers security when they choose a diesel and are on their side as a strong partner.’

The move is similar to one announced by BMW in March. Customers with a leasing contract on a BMW diesel car will receive a promise that, if during the lease period, any bans are implemented within 100 kilometres of that vehicle, it can be exchanged through a comparable termination agreement for another BMW Group product.

Volkswagen is also extending its trade-in scheme for older vehicles, announced after the German diesel summit in August 2017. The incentive package will now run to the end of June. This mirrors other manufacturers who have announced extensions to their plans, with Opel also suggesting its scheme will continue to the end of April 2018.

The need for incentives is clear, with research by the German Motor Vehicle Trade authority ZDK suggesting that dealerships in the country are having to discount Euro 5 models to shift them off their forecourts.

Of 1,817 dealerships polled, one-third of the respondents said that they had to devalue Euro 5 diesel for sales between 30-50%, while another third rated vehicles between 10-30%. For 10.6% of dealers, Euro 5 diesel is currently not for sale.

To stabilise the value of the Euro 5 diesel, 43% of brand dealers are demanding a hardware retrofit of these vehicles.

Even with Euro 6 diesels, the situation is currently not ideal according to the survey. According to 38.7% of surveyed dealers, they can currently sell only the latest diesel of the emission standards Euro 6d and Euro 6d-Temp. For around 37.2% of dealers, a sale of Euro 6 diesels is currently not possible.