Diesel at cross-roads as Germany's auto bosses, politicians meet

Austria investigating two companies related to VW scandal

The industry is under huge pressure to help curb air pollution, after the diesel emissions scandal, which exposed cheating to manipulate test readings.

German politicians and carmakers have reached an agreement to cut inner-city pollution to avert bans of diesel vehicles, a source close to a crisis meeting said on Wednesday.

The German auto industry provides over 800,000 jobs domestically with exports worth over €400 billion a year ago.

Carmakers agreed to install new engine management software to make emissions filtering systems more effective and bring down pollution levels of nitrogen oxide by 25 to 30 percent, the auto industry association VDA said.

It came amid worries about possible bans on driving older diesel cars in some cities and wider questions over whether diesel as a technology even has a future.

Environment Minister Barbara Hendricks, from the centre-left Social Democrats, criticised the VDA automakers lobby for putting out a statement proclaiming a deal two hours before ministers spoke to the media.

At today's Summit participate the head executives of Volkswagen, Porsche, Audi, Daimler, BMW, Opel and Ford in Germany.

The stakes have increased for German carmakers in recent weeks.

German vehicle sales data on Wednesday showed diesel auto sales fell 12.7 percent in July.

German ministers and representatives of vehicle industry are all set hold a meeting to discuss ways to tackle pollution and restore the tarnished reputation of the nation's auto industry. "So it's about criticising what needs to be criticised, but to do so while bearing in mind that it's a strategically important industry in Germany", added Demmer.

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

VW's emissions test cheating - which was exposed by US regulators - led to a string of revelations that showed diesel vehicles from most manufacturers release far more NOx gases on the road than in laboratory tests used to assess their safety. Average emissions per vehicle rose 0.4 percent in July to 128.4 grams of carbon dioxide per kilometre, it said.

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