Germany, carmakers to continue diesel talks: transport minister

FRANKFURT/BERLIN (Reuters) - Carmakers and German government representatives failed to reach a compromise on Sunday over potential hardware retrofits for older diesel vehicles, with the country's transport minister saying further talks would take place in the coming week.

Sunday's meeting took place ahead of a deadline at the end of September set by Chancellor Angela Merkel to stave off bans on older vehicles.

Differences of opinions between the conservatives and the Social Democrats over how to tackle the problem of diesel cars with high nitrogen oxide (NOx) emissions have strained the conservative-led coalition.

The Environment Ministry had wanted hardware retrofits costing around 3,000 euros ($3,526) per vehicle rather than tweaks to engine management software seen as less effective.

Transport Minister Andreas Scheuer favours incentives for drivers of older diesel vehicles to trade them in for newer models to curb pollution.

"Discussions with the German manufacturers took place with the common will to work out a solution for the diesel issue as well as for inner-city mobility," Scheuer said in a statement after the meeting.

"Diesel fleet renewals is the top priority. Hardware retrofits were also discussed," he said, without providing further details about the nature of the talks.

Scheuer said there would be further discussions this week in the government, as well as between the Transport Ministry and the carmakers. Sunday's meeting was also attended by Daimler <DAIGn.DE> Chief Executive Dieter Zetsche.

"We want to reach a result soon. More specific measures and plans are to be worked out by the end of the week," Scheuer said.

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(Reporting by Christoph Steitz and Michelle Martin; Editing by Edmund Blair)