North Korea in the Slow Lane

The People's Car

Asia Sentinel/October 31, 2008

Cult leader Sun Myung Moon helps Kim Jong-Il build Fiat knockoffs for which there are no drivers

Since 2004, Pyongyang has started to boast billboards - not pictures of the smiling Dear Leader or Great Leader exhorting increases in production, but actual advertisements for actual products - an actual single product, rather.

Scattered around the city of almost 3 million people, the billboards all promote the same company: Pyeonghwa (Peace) Motors, North Korea's only passenger car manufacturer. A joint venture started in 2002 between the Reverend Sun Myung Moon's Unification Church and North Korea's Ryongbong Corporation, the factory produces a tiny amount of cars for a tiny domestic market.

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 Myung 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. Japanese cars used to be the most common until the beginning of 2007, when Kim Jong Il banned them from the road. Reasons vary. One report has it that a wrecked Japanese car blocked the way of his convoy as he was leaving his father's mausoleum. Others believe it was in reaction to Japan's increasing pressure over such issues as the North's refusal to tell the Japanese what happened to their kidnapped citizens, or over the North's nuclear bellicosity. While this order only applies to non-government and non-company cars built before 2003, it certainly has not made getting around Pyongang any easier for the tiny majority of residents who travel by car.

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.

And while there are many ways the money could be better spent in a starving county, at least capital is flowing into the country and producing a product that might be economically viable in the future.

One has to cobble together what one can to make conclusions about a country so inscrutable that analysts seize upon any little symbol can find they find in the hopes of discovering something new. Residents, the main source of information for news elsewhere in the world, can barely speak to the media at all without getting into trouble, and when they do they have to stick with the party orthodoxy. Foreign businessmen in Pyongyang are quite reticent, understandable for people living in what may be the most paranoid place in the world.

Still, it helps to remember that in general, whether ardent communist or virulent anti-communist, people like to make money. In 1980, Reverend Moon founded CAUSA International, which called for a "worldwide ideological offensive to counter the global threat of communism," and preached for years on the evil of the Marxist systems. In 1991 the North Korea-born Moon met with Kim Il Sung, head of the regime that tortured him in 1948, and gifted him millions of dollars. Now Moon's company owns the Potonggang Hotel, considered the best in Pyongyang, and the only place in the country where visitors can watch CNN.

North Korea will not remain a backwards communist state that produces handmade cars forever. While its annual per capita income is US$1,700, the same as the Ivory Coast, it is in a key geographical location with billions of dollars of investment waiting to be poured in from China, South Korea, and Japan. And as it keeps opening up, there will be profits to make, profits enough, one hopes, to trump ideology.

Isaac Stone Fish is a freelance writer based in Beijing.

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