North Korea deal leaves Volvo red-faced

0 0 January 17, 2023 Edit this post

by Bill Buys

NOT paying for something amounts to one word: theft.

And one of the most brazen thefts in the car industry dates back to nearly three decades after the end of the World War II.

Japan had surrendered Korea, which was then split between North and South and the Swedes thought doing a deal with the fledgling North Korea would be a sound move – especially since the North Koreans, although relying on foreign aid, had been buying machinery from Scandinavia.

So the Swedish government decided the North Korean market had promise.

They even set up an embassy in Pyongyang – the first western country to do so.

The trade contracts signed with North Korea also stipulated the buying of 1000 Volvo 144s.

The North Koreans liked the Euro look and the famed reliability of the Scandinavian sedans.

But what Volvo didn’t know was that North Korea never planned on actually paying for them.

However, the trusting Swedes built the cars and shipped them off to Pyongyang as per the signed contract.

The cars were then distributed to those close to the rulers, and became a sign of good friendship with the authoritarians.

The Volvo 144 was a fine product, the ‘144’ indicative of its make-up: first of its kind, 4-cylinder engine and 4 doors.

It was such a success that it ended up being made in Belgium, Canada, Australia, Malaysia and South Africa.

North Korea still has most of the Volvos delivered in 1972 and 1973, but that’s 50 years ago – and they’ve still not been paid for.

Some of the Volvo 144s are sill in service 50 years later.

Sweden and Volvo never expected North Korea to welch on its promise, so they didn’t mind waiting for the money and only started asking about the $A182 million in 1976, and became serious about it later.

The super-polite Swedes now ask Pyongyang to cough up once every two years, but the account, which has since blown out to $A462 million, will seemingly never be paid.

Volvo didn’t end up in trouble because the Swedish government paid the carmaker in full from public funds, so the accounts department in Stockholm has to keep trying to get the money back.

Maybe Kim Jong Un will relent this year. Probably not, since he scoots about in an Audi R8 these days, or in his Range Rover. Or Lexus. Or his Maybach.

But more than a few of the 1972/3 Volvo 144s are still running about in his country, thanks to a ‘deal’ that actually amounts to the biggest car theft in history.

Meanwhile, North Korea has its own car industry with two production plants, Sungri Motor Plant and Pyeonghwa Motors, the latter also basking in the glory of being the nation’s sole used car outlet.

Pyeonghwa means ‘peace’ and the company was run by a joint venture between the Unification Church and Ryonbong, a government-owned company until 2013, when the church ceded its holding to Ryonbong.

However, despite a reputed capacity to build 10,000 vehicles a year, only around 400 units see the light of day every 12 months.

Sungri also builds a handful of cars, mostly clones of the Russian GAZ Pobeda, VW Passat, W201 series Mercedes and a 4WD that looks like a Jeep Wrangler, but its badge says it’s a Sungri 410 (which in reality is a Chinese Leopaard.) Yes, with two ‘a’ s.

At the 16th Pyongyang Spring International Trade Fair in 2018, all of 36 new models were shown.

However, a closer look confirmed they were all Chinese-made vehicles, rebadged with Pyonghwa logos and names.

So a Hwiparam 1504 is actually a Brilliance FSV, a Hwiparam 1607 is a FAW-Volkswagen Jetta, a Ppeokkugi 1515 is Beijing E150 and you can even get a Haval there – except that it’s called a Pyonghwa Ppeokkugi 2025.

Good luck with trying to pronounce that.

But there’s no sign of any new Volvos, cloned or otherwise.

And the Swedes go on hoping for that magic day when dear old Kim actually pays for those wonderful cars of yesteryear.