Volkswagen has launched a buyback offer for diesel cars in Germany, providing new customers with a guarantee in case of driving bans imposed by authorities.
The offer applies to new and one-year-old cars bought from April 1 throughout 2018.
Go deeper with GlobalData
The guarantee means if local authorities restrict circulation of diesel vehicles – which a recent German federal court ruling deemed a legitimate move – affected customers can bring their car to the Volkswagen dealership of purchase for a trade-in equivalent to the car’s current value, towards a compliant vehicle.
Customers will also receive an additional premium, for a maximum value equal to the diesel environmental incentive they received on the old vehicle. Current incentives on VW passenger cars range from €3,000 (£2,600) on the Polo to €10,000 on the Touareg.
Motor Finance asked Volkswagen whether they would consider similar initiatives abroad should other countries introduce diesel bans. At the time of writing, Volkswagen had not replied.
Thomas Zahn, head of sales and marketing Germany, said: “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.”
How well do you really know your competitors?
Access the most comprehensive Company Profiles on the market, powered by GlobalData. Save hours of research. Gain competitive edge.
Thank you!
Your download email will arrive shortly
Not ready to buy yet? Download a free sample
We are confident about the unique quality of our Company Profiles. However, we want you to make the most beneficial decision for your business, so we offer a free sample that you can download by submitting the below form
By GlobalDataEarlier this month, analysts at rating agency Moody’s sounded an alarm around the local diesel ban ruling in Germany and its possible effects on residual values in leasing contracts.
“The February 27 ruling … will hit auto finance companies and auto dealers in particular,” Moody’s said.
“The fear of far-reaching diesel disincentives … will require close monitoring by the large captive finance firms of German automakers, which are particularly exposed to the residual values of younger-generation Euro 5 and Euro 6-compliant diesel cars, which also form the backbone of corporate car leasing fleets.”
Moody’s said it expected carmakers to “employ their financial and marketing strength” to minimise exposure to falling values.
Other retail and fleet providers have also started to implement measures to safeguard their stock. Sixt Leasing recently said it would gradually shift the composition of its fleet car park away from diesel, as well as halve the portfolio of vehicles not covered by buyback agreements with dealers.
