Pyonghwa Motors Update

The Asia Sentinel offers an update on Pyonghwa Motors’ production and sales numbers:

Does it make economic sense to build or invest in a car factory for a country with 23 million people but fewer than 30,000 vehicles, a city where cars are so scarce that in the warmer months, traffic ladies swinging their stop signs act in place of electric lights, where hardly anybody knows how to drive? And why is Sun Mymung Moon, owner of an international business empire and a virulent anti-communist, investing in North Korea?

Pyeonghwa Motors invested around US$55 million to build the factory on a one-time rice paddy near the port city of Nampo, about 50 kilometers southwest of Pyongyang. In 2003, the JoongAng Daily quoted an executive from the Seoul-based Pyeonghwa, saying he expected the factory, with capacity to build 20,000 cars a year, to eventually turn a profit. However, a spokesman based in Seoul says Pyeonghwa has produced only 2,000 cars and pickup trucks in their first five years of operation.

How many cars have they actually sold? For North Korea, any statistics, much less accurate ones, are “very difficult to come by,” said Erik van Ingen Schenau, an Asian car analyst and author of the book “Automobiles Made in North Korea.” He quotes a French newspaper article that claims the factory sold around 400 vehicles, including SUVs, pickups, and sedans, in 2006.  He estimates the factory sold anyone from 400 to 1000 cars in 2007 and 2008, including the cars they exported to Mekong Auto, a Vietnam-based Moon company, and including the vehicles that they produced with the Shenyang-based China Brilliance. 

The Pyeonghwa factory produces cars with names such as Whistle, Cuckoo, and Three Thousand Li, which refers to the national territory of Korea, both North and South peppering the empty streets of Pyongyang, “You see these cars a lot, especially the Cuckoo,” said Simon Cockerell, general manager of Koryo Tours, one of the few western tour companies licensed to operate in North Korea. 

“It took drivers some getting used to because they were used to driving Japanese cars, with steering wheels on the right,” Cockerell said. 

Like most items produced in North Korea, the Pyeonghwa vehicles are not known for their quality. “They are probably nearly all hand-assembled, and based on a model from a factory in China that does not have a good reputation,” van Ingen Schenau said. “They make cars that no one is interested and in that they cannot export to Japan or South Korea. Maybe it is a prestige item to have a car factory in the country, but it does not seem to have worked out at the moment.”

The Whistle, based on the Fiat Siena, is one of the Pyeonghwa vehicles featured on billboards. It sits on a field next to a superimposed image of the Pyongyang Arch of Triumph. Built to commemorate Kim Il Sung and the Korean nation’s resistance to the Japanese occupation, the arch stands 60 meters tall, more than 10 meters taller than its model, the Arc de Triomphe in Paris. A boy stands next to the car one hand holding a trophy, while waving a hand, a smile on his face and a medal around his neck.  The billboard reads: “Whistle. A Strong and Beautiful Automobile.”

It is important to remember the target audience of the billboard. It is not only for the few thousand European tourists who visit the country for six days at a time, or the few hundred businessmen and embassy staff who live in one of the few foreigner hotels isolated from the city. The billboards also exist for the residents of Pyongyang, to show them that their country, despite the harm done to it by the entire capitalist world, is still able to go its own way and produce a strong and handsome car.

The full article can be found here:
North Korea in the Slow Lane
Asia Sentinel
Isaac Stone Fish  
10/31/2008

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