Many friends of mine have often asked me these questions: Are there cars in North Korea? Do the North Koreans go to work or school on foot?
Based on what I have personally witnessed, North Korea actually has a pretty decent public transport system, at least as far as the urban regions are concerned.
North Koreans are quite proud of their country’s subway network, too.
As to cars, it is true that there aren’t too many of them on the main streets of Pyongyang, but their numbers are continually on the rise. Some of them were actually made in North Korea.
The country’s female road traffic controllers are a must-see attraction for tourists.
There is only one standard car manufacturer in North Korea – Pyeonghwa Motors. It was founded in 1999 as a joint venture with the South, and was based in the city of Nampo.
However, due to its own technological limitations, Pyeonghwa Motors was only able to produce under license from Fiat, China’s Brilliance Auto, South Korea’s SsangYong, etc.
Pyeonghwa Motors’ operations have been shrouded in mystery. While it has been rumored that the automaker went out of business in 2012, it is also said that the company has teamed up with Fiat and SsangYong and started producing cars in a new assembly plant in Vietnam.
I do have doubts as to whether that rumored assembly plant in Vietnam really exists. As the seventh largest automaker in the world, the Fiat group is unlikely to take the risk of embarking on a major joint venture with state-owned Ryonbong General Corp., which is the parent company of the Pyeonghwa Motors, and which is still on the list of economic sanctions imposed by the United Nations.
More than anything else, Pyeonghwa Motors serves as a symbol. Even at its peak 10 years ago, it could only produce some 300 vehicles a year.
Apart from those that were made domestically, cars running on the streets of North Korea are mostly second-hand vehicles imported from other countries such as the former Soviet Union, East Germany and Czechoslovakia, all of which no longer exist today.
On the other hand, one can also come across second-hand Japanese cars in North Korea.
Chances are, these cars were either smuggled into the country or bought from a third country, since Pyongyang is still under UN economic sanctions and therefore the vehicles couldn’t have been directly imported from Japan.
With regard to buses, lorries and private cars, they are mostly imported from China, which is hardly surprising as Chinese goods currently account for over 90 percent of North Korea’s total imports.
Meanwhile, several South Korean automakers such as Hyundai and KIA have also established assembly lines at the Kaesong Industrial Region.
However, given the volatile relations between Pyongyang and Seoul, the Kaesong industrial zone has seen on-and-off operations over the years. As a result, the production capacity of these assembly lines has remained virtually insignificant.
And since Kim Jong-un took power in 2011, he has been working aggressively to modernize Pyongyang, including allowing more imported cars and introducing brand-new, locally-made subway train carriages fitted with LCD route map displays.
If Kim is to further open up the North Korean market, the auto sector is pretty likely to be on top of his agenda.
The North Korean auto market undoubtedly has a lot of business potential.
Following the inter-Korea summit, many companies are waiting and hoping for a breakthrough that would open the markets of the North.
If we can see a lot of imported cars running on Pyongyang streets, that will certainly mark the beginning of a new era.
But the thing is, while the people in Pyongyang have been witnessing remarkable improvements in the quality of life in recent years, life in other parts of North Korea might well be another story.
This article appeared in the Hong Kong Economic Journal on May 4
Translation by Alan Lee
[Chinese version 中文版]
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