FILE PHOTO: A Mercedes-Benz "Vision URBANETIC" concept car is seen in front of the Daimler AG logo during the company's annual news conference in Stuttgart, Germany, February 6, 2019. REUTERS/Michael Dalder

BERLIN (Reuters) - Daimler DAIGn.DE said on Tuesday Mercedes-Benz customers in Germany could apply for a 3,000 euro ($3,350) subsidy to upgrade the exhaust filters of older, polluting diesel vehicles, the latest effort among German carmakers to avoid inner-city bans.

Carmakers have been forced to consider upgrading exhaust treatment systems on older cars after German cities started banning heavily polluting diesel vehicles to cut fine particulate matter and toxic nitrogen oxides.

Daimler launched a website this week to process applications for financial support, as German motor authority KBA seeks to approve an after-market kit to upgrade the exhaust systems on various Mercedes diesel passenger vehicles.

The company has offered the subsidy to customers in German regions that face potential driving bans, the carmaker said. For a factbox about possible diesel bans, click:.

The first retrofit kit for Mercedes cars with “Euro 5” diesel engines, including the best-selling E220 and E250 models, has been developed by Dr Pley SCR Technology, a Bavaria-based, family-owned business.

It will cost around 3,000 euros to buy and install.

German carmakers initially offered software updates and shied away from endorsing hardware retrofits, instead lobbying for customers to buy new cars with cleaner engines.

But consumer groups pressured carmakers to endorse retrofits as a more cost-effective measure.

“We have known right from the start that retrofits are feasible and have now proved this to the carmakers,” said Thomas Steinbrueckner, head of development at Dr Pley SCR Technology.