Thanks to the Olympics, Chinese manufacturers are more attuned to creating environmentally-friendly cars than their foreign counterparts.

Question: How is the Chinese automotive industry responding to the green movement?

Jack Perkowski: Every local car company in China is working on hybrids. In fact, going back to the point; Toyota makes a Prius Hybrid now in China, 260,000 RMB. [IB] a local car company makes a hybrid, it’s a 160,000 RMB, not as good as that Prius, I guarantee you, but it’s a 100,000 RMB cheaper. Every single local car company and local car company is [accounted] for 30% in all the passenger car business in China. The truck and bus business is almost completely local. There is no foreign company that has a meaningful participation in that commercial vehicle industry. So there’re a lot of local passenger car companies, truck companies, and so forth, diesel engine companies that are all thinking about the environment. Everybody’s working on programs to improve the fuel efficiency and the environmental impact. I think that the whole thinking about the environment in China’s mind switched 7 years ago when they announced that the Beijing would get the 2008 Olympics. At that point, every official in China realized that in 2008, for the first time, millions of people are coming to China and they didn’t want the environment to be the big issue.

So there’s a long way to go and believe me, China’s got a huge environmental issue. But, the first step begins with thinking differently; I think that’s already happened. And so, everybody’s conscious about it. They’re working on it.

I guarantee, I think a lot of the new innovations, for example, in the auto industry, they’re going to come out of China. Why? Because there’s no single country in the world that has a bigger vested interest in getting that done than China. China needs to grow to lift up those 900 million people. To grow, it needs more transportation. If more transportation, the more pollution. If it can’t make available that transportation, that’s a constraint on growth. So for China, it’s a matter of economic life and death to find better ways to do it. And that’s what I think is going to happen over the next 10 years in China.

Recorded on: September 22, 2008