Diesel-powered automobiles are more popular than ever in the U.S. and more buyers are opting for the diesel version of a car where both petrol and diesel versions are available.  In 2009, 33% of Volkswagen Touareg buyers opted for the diesel and those lucky buyers got a car with 25% better fuel economy as well a Federal tax credit for $1150.

Indeed, given Volkswagen’s long history with diesel in the U.S. (only surpassed by Mercedes-Benz in this area), it’s not surprising that almost 50% of Jetta buyers opted for the diesel version of that car.

The 2010 Touareg gets its name from the nomadic Tuareg people, believed to be descended from the ancient Saharans.  The Tuareg operated the trans-Saharan caravan trade that connected the major cities on the southern edge of the Sahara for two centuries.  What the Touareg also gets from its namesake is excellent off-road handling, thanks to great ground clearance and a permanent all-wheel drive system with low-range gearing.

The Touareg shares its platform with the Audi Q7 and the Porsche Cayenne and provides many of the amenities of the more expensive vehicles at a reasonable price, including rear parking assist, Bluetooth, satellite radio, heated front seats, dual-zone climate control, and a power tailgate.

Inside the cabin, one has to look at the badge on the steering wheel to remind oneself that it’s a Volkswagen.  The high-quality plastics as well as the fit and finish are top notch as well.  The optional hard-drive-based satellite navigation system is fairly easy to use and got us where we needed to go.  The optional Dynaudio sound system has a great sound to it and the Lux Limited Package adds soft Cricket leather seats as well as metal trim and a good-looking ground effects kit to the exterior.

The 2010 Volkswagen Touareg comes with front-seat side airbags and full-length side curtain airbags, which played a role in the National Highway Traffic Safety Administration’s giving the Touareg a perfect five-star rating for frontal and side impact.

While I didn’t get to take the Touareg for a drive in the desert, driving it on city streets and highways was very satisfying. The ride was unquestionably firm and the interior was an oasis of quiet luxury. For a car of its size and heft, handling was surprisingly responsive.

The Touareg’s 3.0-liter TDI V-6 – while smaller than the petrol 3.6-liter V-6 – is an imperceptible 0.3 seconds slower but the 25% better fuel economy is palpable.  The car consistently delivered or exceeded the EPA mileage rating of 18 mpg city/25 mpg highway.

While the diesel Touareg isn’t for everyone, and the TDI costs $3500 more than the gasser before factoring in the tax credit, the price premium is less than for most hybrids and the stellar fuel economy for a vehicle this size can’t be beat.

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