HAMBURG -- Volkswagen is prepared to support hardware retrofits for older diesel vehicles and offer incentives for drivers to swap some older diesel vehicles for newer ones, a person familiar with the matter said.

VW CEO Herbert Diess pledged to back a solution to help fund installing more effective exhaust filters during a conversation with German Transport Minister Andreas Scheuer on Wednesday, Germany's Spiegel Online said.

The agreement comes as the German government is due to hold a diesel summit on Friday with Scheuer, who has ruled out a taxpayer contribution to possible retrofits.

VW has rejected a proposal that carmakers should buy back older diesel vehicles, the person further said.

VW agreed to fit older diesel vehicles with better catalytic converters, reversing its position and bowing to political pressure which mounted in the three years since an emissions cheating scandal, Spiegel Online said.

German cities have been sued by environmental groups for repeatedly flouting European clean air rules, a step that has led courts to propose banning of older diesel vehicles as a way to cut pollution from particulate matter and nitrogen oxides.

Carmakers are now scrambling to avert outright banks of diesel vehicles.