The proposal as it stands may well be a bit over the top and may get watered down, but German tuning companies manage to survive and prosper and they had this situation for many years. Probably this is why German tuning firms are so good. The thing is that these companies have to get the products and the services they offer approved by the TUV for the model of car. Once this is done anyone can buying the items and fit them to their own car or have the company carry out an approved upgrades without any further problems. What is does stop is 'cowboys' carrying out things to cars that should not be done on the grounds of safety or the environment.
Germany cars are, I think, subject to a TUV test every two years, but if the car is stopped by the police or involved in an accident and found to have items on the car that are not TUV approved they car be prosecuted.
Classic cars would probably be exempt because they have never seen subject to the Type Approval process. Again there are losts of classic cars in Germany and there manage to cope with the situation.
