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VOLKSWAGEN GROUP has announced it will offer as much as €10,000 to owners of older diesel to tempt them to trade them in for a new VW in their home market.

The aim of the new scheme is seen as VW Group enthusiastically backing the German government’s new drive to rid the country of ‘polluting’ diesels, Dieselgate – the irony.

The cynical among us can only see the pressures coming from Angela Merkel, on her campaign trail recently bashing the CEOs of the German auto industry from the revelations of the Dieselgate affair and the effects it has had on the German industrial reputation, a reputation that Germany has built its whole economy on.

The auto industry is the largest industrial sector in Germany, contributing about 2.7% to GPD. Some 20% of Germany's exports are from the auto industry. Domestic and export auto sales are in the region of €400billion a year employing over 800,000 people.

Who has who over a barrel is difficult to see on the face of it but the German car industry throughout its history has had strong political connections. We all know who commissioned the ‘Peoples Car’. In VW’s case today, the German state of Lower Saxony owns 20% of VW’s voting stock worth €7.7billion making it the second largest shareholder.

Two representatives on VW's supervisory board have regional political careers with little insight car-making industry. The German auto industry will be a political football in the upcoming German elections but could spell the end of political meddling in the industry for good.

Other German automakers have also offered the German government a new quick fix software update to cut NOx emissions in five million vehicles. The free fix, seen as an industry-wide attempt to avert an outright diesel ban, is claimed to reduce harmful smog-inducing NOx emissions by 25 to 35 per cent.