By Kim Sue-young
Staff Reporter
South Korea's automobile brands Hyundai and Kia are gaining popularity globally with their advanced technology and sleek design. But when it comes to North Korea, it is not easy to find any vehicles made by those companies.
Instead, Pyeonghwa Motors, the only inter-Korean venture in Pyongyang, is attracting North Koreans with affordable prices, high fuel-efficiency and nifty exteriors.
Park Sang-kwon, president and CEO, said that the firm's car sales are related not only to profit but also to the unification of the Korean Peninsula in the future.
"Increasing car sales there means that the North Korean economy is getting better. Once it improves, we, in my understanding, can talk about unification as equal partners," he said in an interview with The Korea Times in Seoul, Wednesday.
Many scholars have expressed concern that South Korea would have to spend a large amount of taxpayers' money in the post-unification period to support the impoverished North and thus, face an economic predicament similar to the one Germany experienced.
The CEO said that business is an influential tool to improving inter-Korean relations and achieving mutual benefits.
"Tourism and assistance through non-governmental organizations are one-sided provisions of rewards," he said. "But the two Koreas can deal with business and economic cooperation on an equal footing for mutual benefits."
For example, the North can learn about technology and gain know-how on exports, while the South can take advantage of a cheaper labor force, he said.
"Once South Korean firms enter the North and their employees work with North Koreans, inter-Korean animosity will soften," Park said.
The car maker sold more than 300 vehicles in the North in 2007 - the figure rose to 650 in 2008 and 1,300 in 2009.
North Korea imported vehicles, mostly used ones, from Japan and Germany but now, Pyeonghwa-made cars have become a common sight in Pyongyang.
The company is backed by the North Korean regime. Kim Jong-il named the company's sports-utility vehicle, built from the Fiat Doblo model design, "Ppeokkugi" (Cuckoo).
Park said that North Korean customers are satisfied with the cars built by Pyeonghwa.
The company's turnover reached about $500,000 last year and the figure is expected to increase to about $630,000 this year.
For Park, who has frequently visited the reclusive state over the past 17 years, this means more than just money.
"It is meaningful that the money we earned in North Korea has been included in the gross national product (GNP)," he said.
Park visits Pyongyang once or twice a month and is well-versed in North Korean affairs.
As for its recent currency revaluation, he said the North has recently begun to allow its people to use foreign currency again.
"Since it eased the restrictions on its market, I believe that the currency reform will be successful," he said.
He wasn't paid for cars sold last month but began to receive money in dollars earlier this month.
"Some reports said that prices in the North skyrocketed about 20 to 30-fold after the revaluation but what I heard was that the country saw a five-to-six-fold price increase," he added.