It looks like Volkswagen does have plans to offer its compact Rabbit with diesel power. According to Autoblog Green, the diesel version will be launched in late 2009 when an updated version of the existing Rabbit is scheduled to roll out.
VW’s current diesel four-cylinder returns fuel economy ratings of 29/40 mpg city/highway when planted in the larger Jetta TDI, but the Rabbit is lighter by 150 pounds and has potential to achieve better fuel economy.
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