i like subarus. basically everyone in seattle does. asian brands in general seem to be over-represented here, but the subaru legacy outback is practically seattle's official car. either the outback or the toyota prius.
(unrelatedly, i hate the prius. i drive them at work and hate them. i'm using the word "hate" here to refer to my feelings about a car. i love cars. i even like most trucks. but priuses just have a way of making me mad every time i drive them. always interfering, trying to out-think me. i hate it.)
anyway, subarus are popular because they provide 98% of the functionality of an SUV without the social stigma. so, you can have a car that is great at getting to potholed trailheads and snowy ski areas without the image of poor fuel economy. unfortunately, subarus don't actually do that much better than SUVs in fuel economy. not as much better as they seem like they should, anyway.
this is where the new diesel engine comes in. it'll offer basically the same performance as the current base level engine, but get 40 mpg instead of the 27 mpg that is advertised for the current engine. (i've read claims that the advertised 27 mpg turns into about 20 mpg in real life)
presently, they only have plans to sell this engine in europe because the emissions laws in the US are a lot more strict than the ones in europe. but if they work out a way to be legal in the US, i think we'd see the prius disappear from the seattle landscape along with virtually every other car, replaced by a sea of L.L. bean palette metal and plastic.