I agree that 29/40 MPG (city/highway) seems a very poor mileage for a diesel sedan or station wagon.
The best highway mileage I have achieved with a gasoline
1.8-litre VW Gol (made in Brazil) is 43.75 miles per US galon
= 18.6 km/litre = 5.376 litres per 100 km
My top speed was 62 MPH (100 km/hour)

I own a 1981 VW Rabbit, diesel, pickup and it gets a well documented 43 mpg combined city/highway (commuting in suburbs) and 50mpg highway @ 60mph. The pickup has a smaller 1.6 l diesel, not turbocharged. The Jetta has a 1.9 Turbo diesel - although with a more efficient combustion system (TDI rather than IDI). It should be getting mileage comparable to my 27 year old car.

As a side note, it's fascinating, all of the hype over hybrids that get worse mileage in real world circumstances that a 27 year old VW Rabbit. "Environmentalism" has become an emotion based system of beliefs rather than a logic (analysis) based belief system. If logic based, the high mpg diesels would get the same rights to car pool lanes as hybrids since they get better mileage for a comparable car.

I can understand why they don't encourage diesels in LA and Atlanta etc., but why not use them in sparsely populated rural areas.
A little bit of NOx and particulates isn't going to do much harm to Montana - and the distances are much greater there.
Politics and protectionism, I guess.

So this is what it translates to on a standard test...29/40.

Now I'm sure "real world" is when driven by someone conscious of fuel economy but the EPA tests more closely reflect the average driver in the US (aggressive acceleration, HVAC at high loads, etc)

It's good to see the VW qualify for some tax credits, although the reports I saw indicate that many dealers will sell out their small allotment of TDIs this year before they even get here. So the gov't rebate might make up for the mark-up the dealers will probably charge (just like for the Prius).

Instead of tax credits, here's an easier way to encourage high MPG cars. Raise gas taxes! Of course the $4 gas is already doing that. Too bad our "leaders" didn't have the courage to do that years ago. We wouldn't be in the mess we're in now if they had.

For all those gloating about how their 198x Car Y got great MPGs this once, here's an article.
http://money.cnn.com/2007/12/17/autos/honda_civic_hf/?postversion=2007121916

Steve M:
A 27 year old car does not have the safety, emissions control equipment, or performance of today’s vehicles. Especially hybrids. If you include all facts, the logic is pretty clear and compelling.

mahonj: I can understand why they don't encourage diesels in LA and Atlanta etc., but why not use them in sparsely populated rural areas.
A little bit of NOx and particulates isn't going to do much harm to Montana - and the distances are much greater there.

That's backwards. NOx will be a bigger ozone problem in Montana because that's a NOx limited region. It will destroy ozone in LA and Atlanta because those are VOC limited (there are of course much better ways to reduce ozone than adding more NOx).

These things have DPFs so from a particulate point of view these will be much cleaner than any gasoline car.

anon: EPA tests more closely reflect the average driver in the US

EPA has typically underestimated diesels. They don't actually road test the cars -- they put them on a dyno and apply "corrections" to get their estimates.

The out the door price for a Civic hybrid in Phoenix is about +5k$ for the hybrid upgrade +5k$ extra demand markup. If you drive 25 hours a day in city traffic it'll pay off in no time. The Jetta TDI will likely be the same. Another GM plot (GM = German Manufacturer).

I own a 2005 VW TDI wagon. Recently, I drove (at a max speed of 55 mph) from NW Montana where I live to Bend, OR and back getting 46.6 mpg. This included some hill climbs of a few thousand feet. My previous car was an 85 Honda wagon and it commonly got 40 mpg on the highway. I too am not impressed with most hybrid and micro car fuel economy claims. My next car will probably be a Think since most of my driving is close to home. I believe the future will be all electric vehicles, electric mass transit and electrified railroad freight. Life style changes are imminent.

Figures from earlier post for comparison:

2008 Model Year EPA Fuel Economy Leaders
Ranked by Combined MPG
# Manuf/Model MPG US
City Highway Comb.
1 Toyota Prius 48 45 46
2 Honda Civic Hybrid 40 45 42
3 Nissan Altima Hybrid 35 33 34
4 Toyota Camry Hybrid 33 34 34
5 Ford Escape Hybrid FWD
Mazda Tribute Hybrid 2WD
Mercury Mariner Hybrid FWD 34 30 32
6 Toyota Yaris (manual) 29 36 32
7 Toyota Yaris (auto) 29 35 31
8 Toyota Corolla (manual) 28 37 31
9 Honda Fit (manual) 28 34 31
10 Ford Escape Hybrid 4WD
Mazda Tribute Hybrid 4WD
Mercury Mariner Hybrid 4WD 29 27 28

The hybrids do very well in city driving
(e.g. Prius 48 vs Corolla 28)
The tdi does well on the highway.

NOx g/km: Jetta tdi 0.182 Prius 0.010

It would have been more useful if AMCI had driven a Prius, Civic ima, Escape hybrid, Mercededs cdi & Jetta tdi together on the same trip.

Now the government of Spain wants to cut the speed limit
to 50 MPH (80 Km/h) !!

http://www.treehugger.com/files/2008/07/spain-co2-cuts.php

Just bought a TDI (picking it up on Thursday), and the dealer mark-up was $1,500. I think it'll be more later, as word gets out. But VW has been hurting lately. When I went a month ago to drive a gas Jetta, there wasn't an empty space on the lot. No cars being sold.

This tax credit is a nice balance over the mark-up.

Random thought - after the warranty runs out, you can convert this engine to run on cooking oil, thereby eschewing the whole gas prices thing entirely.