By Evan Ramstad
- Getty Images
- North Korean workers assemble cars at the Nampo Pyeonghwa Motors’ factory in 2007.
An experiment in building cars in North Korea appears about to end, though it will do little to ease the world’s oversupply of auto manufacturing capacity.
Pyeonghwa Motors Corp., a company started by the South Korea-based Unification Church in 1999 that runs a factory in North Korea, is planning to close, South Korean media reported Tuesday.
The North Korean government is a 30% partner in the car manufacturer.
A unit from the church’s business arm spent about $55 million to build the Pyeonghwa factory in Nampo, a port city on North Korea’s west coast about an hour or so outside of the capital Pyongyang. After the factory was completed in 2002, workers there completed partially built cars, in a form called knockdown kits, that were imported from manufacturers in Italy and China.
But the company appears to have rarely been profitable. In 2009, the firm earned about $700,000 from the sale of 650 cars. About $500,000 of that was remitted to its parent operation in South Korea. The South Korean government noted then that it was the first time a South Korea-based company repatriated profits from North Korea.
Read more in Korea Real Time.