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While North Korean leader Kim Jong Un chose to travel by train to Vietnam this week for his second summit with President Donald Trump, he switched to a different set of wheels once across the Vietnamese border: his heavily armored — and luxuriously outfitted — Mercedes-Maybach S600.
While Kim's limousine may stand out in a country that views itself as a worker's paradise, some signs of emerging capitalism have begun to pop up in the Communist state, including privately owned vehicles produced by a handful of North Korean manufacturers and imported from Russia.
Precisely how many vehicles are produced and sold in what is officially known as the Democratic People's Republic of Korea isn’t known. The historically secretive government has declined to provide data to the Organisation Internationale des Constructeurs d’Automobiles, the industry group that tracks global production and sales. But various estimates suggest North Korea can produce as many as 50,000 vehicles annually — including passenger cars, buses and trucks. But the numbers have been running substantially lower in recent years due to the country’s sanction-hit economy.
The first and largest of the country’s motor vehicle companies is Sungri Motors, which produces a mix of products but is primarily focused on commercial vehicles, like the ZR 5000 Dumping Truck. But it does produce a few passenger models, such as the Jaju, essentially a clone of an old version of Volkswagen’s Passat, and the Achimkoy, a clone of a Russian sedan.
The big player in the small market is Pyeonghwa Motors, a joint venture based in the industrial center of Nampo. It was set up in 1999, during one of the thaws in relations between North and South Korea. It was initially funded by Sun Myung Moon’s Unification Church. Considering the late reverend’s vocal opposition to communism, that might seem an odd alliance, but he envisioned it as a way to foster long-elusive reconciliation between the longtime foes. The company’s name itself means “peace,” in Korean.
Unfortunately for Moon and company, profits have proved as elusive as peace on the Korean peninsula. The church abandoned its stake in Pyeonghwa in 2013.
Pyeonghwa Motors produced a grand total of 1,600 cars in 2018, according to one report. And the vehicles it rolls out are decidedly less luxurious than the one the country’s leader travels in. While some new technologies, such as rear parking assist, are now available on some models, base models don’t even offer air conditioning.
Prices start as low as $10,000, which might seem a bargain, but one has to balance that against the average income of a North Korean, which is estimated to be around $1,300 a year. That puts even a base model out of the reach of all but a small elite group of North Koreans — and those largely based in the capital Pyongyang.
As the U.S. has shown, there’s always a market for automotive imports. And North Korea has allowed some in from time to time. Back in the 1970s, Kim’s grandfather authorized the import of 100 Volvos, though the deal remains the center of a dispute, with the Swedes claiming they were never paid.
Back in 2007, Kim’s father, Kim Jong Il, reportedly ordered Japanese-made cars taken off the road after seeing one broken down and blocking the road.
Today, the Russians provide most of North Korea’s auto imports, primarily through Gorkovsky Avtomobilny Zavod, also known as GAZ. Like their Cuban counterparts who are also limited by sanctions, North Korean motorists have become adept at keeping even the most ancient of motor vehicles running.
Leading up to this week’s summit, Trump suggested that what is often called the Hermit Kingdom could transform its economy by agreeing to a peace deal and opening up to the rest of the world.
The current Supreme Leader doesn’t have to look far to see what that could mean — especially from an automotive front. Six decades ago, in the wake of the Korean War, the southern half of the peninsula was an economic wreck. Today, it is one of the world’s industrial powerhouses, with a thriving automotive industry and auto market.
Officials from Hyundai, South Korea's largest automaker, have explored joint opportunities with the North on several occasions and few would be surprised if they didn’t reach out again in the future. But, for now, North Korea remains one of the world’s smallest automotive markets, with all but a small cadre of elite able to afford a car.