Economics and the mid-life crisis have much in common: Both dwell on foregone opportunities

C'est la vie; c'est la guerre; c'est la pomme de terre . . . . . . . . . . . . . email: jpalmer at uwo dot ca

. . . . . . . . . . .Richard Posner should be awarded the next Nobel Prize in Economics . . . . . . . . . . . .

Monday, June 06, 2005

Stalling Problems in Toyota's Prius?

The USA Today reported last week that their gas-electricity hybrid car has had some serious problems with the engine stalling at speeds of 35 and 65 mph [h/t to Jack].

The government has opened an investigation of the hot-selling hybrid Toyota Prius amid reports of the engine stalling without warning, officials said Wednesday.
The National Highway Traffic Safety Administration said the preliminary investigation will involve about 75,000 cars of the 2004-2005 model years.

... All of the complaints reported that the engine shut down without warning and about half of the complaints said that when the engine shut off, the vehicle would not restart and required the vehicle to be towed.
Here is something, though, that is just plain wrong:

The Prius has been a hugely popular model in the United States, leading to waiting lists. Automotive experts have said it is the first economy car with a higher resale value.
The Rabbit Diesel, back during the gasoline shortages in 1978 -79 often sold on the street for more than its sticker price, especially in California. Also, the waiting list to buy one was at times more than six months long. And I expect the street price for a Smart car might exceed its sticker price, too -- the wait to get one in Canada is about 4 months these days.

Why don't the auto manufacturers charge more for these cars? Did they underestimate demand, and do they think that correcting the price would create too much ill will?
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