There has been much talk of downsizing as a result of the recession: people are buying smaller cars in these more frugal times – or, at least, so goes the argument.

It is certainly true that many people are shifting down a segment: for example, moving from an upper-medium to a lower-medium model.

However, as a modern Vauxhall Astra is the size of the 1990s Cavalier, that does not automatically mean they are buying physically smaller cars.

What is sure is that they are not buying less powerful cars.

Power has risen inexorably over the past 20 years, and although it dropped a little in 2008 and 2009 with the scrappage incentive, it is roaring back – the last quarter of 2010 will see it rise above 125bhp for the average car. 

This is slightly worrying for all those car companies investing in alternative technologies for a greener future.

It is clear that consumers are still in love with performance and expect their new car to have more power than their last one.

If consumers were prepared to accept the same performance today as a car from 1990, overall new car CO2 output would fall by 10% at a stroke.

However, the unspoken deal between the manufacturers and the consumers is that the benefits of increased engine efficiency are split between improving performance and improving fuel consumption. 

The pattern is the same in every segment of the market.

In the city car segment, the average power output is now 69bhp – ironically virtually the same as the original Mini Cooper S (70bhp) which was seen in its day as a performance small car.

Today, its engine would not even match a 1.2-litre Hyundai i10.

At the other end of the market, the fact that SUVs have relatively poor fuel consumption may have something to do with the fact that the average model has 184.5bhp – way beyond the original Range Rover which was seen as the aristocrat of off-roaders.

The message from the market seems clear.

Despite the recession, despite the environmental issues, we are still in the midst of a horsepower race.

Performance figures still excite us, whatever we may say.

Improved fuel consumption (and therefore lower VED) is a good way of justifying a purchase decision, but it is not generally the reason for the purchase decision in the first place (with the exception of special circumstances like the 100g/km congestion charge limit).

If the Government wants to really make a difference to our buying habits, it would have to introduce far more draconian taxation than anything currently planned.