North Korea is the most hermetic and opaque country that exists. The dictatorship established by Kim Il-sung, the grandfather of the current dictator Kim Jong-un, has managed to isolate the North Korean population from the rest of the world to guarantee continuity while publishing promotional videos that look like B-class action movies.
Still, this country has done business with Western manufacturers. Without going any further, Kim Jong-un walked around in the summer of 2019 in a Mercedes-Benz S-Class, while everyone wondered where he had gotten the limousine from. But 48 years ago a Volvo’s disastrous foray into this market ended with 1,000 stolen cars by the regime.
The political situation in the world before 1989 was somewhat easier to explain than it is today. On one side were the countries allied with the United States and NATO, and on the other side were the countries allied with the Soviet Union. And in the middle of these two camps were the so-called non-aligned countries, such as Sweden, which were theoretically neutral.
While the United States and the Soviet Union frowned upon each other and periodically issued nuclear threats, the rest of the countries tried to do business with either side.
Italy, for example, sold the license for its Fiat 124 to the Soviet Union, creating AvtoVAZ (Lada) to produce the Fiat 124 in Togliatti, a city built for that purpose. While most Eastern European countries associated with Western brands to have a semblance of automotive industry, North Korea never wanted anything to do with the West..
The illusion that North Korea was a paradise
And so, while the Soviet Union paid the bills, that is, while the North Korean government got electricity and food at bargain prices, the Asian country could afford to launch propaganda nonsense, including make the rest of the world believe that North Korea also made carsAnd that people bought them.
This, in a country where private property is illegal, except perhaps small inherited family objects.
The purchase and alleged production of cars is one more element of the propaganda of the North Korean regime towards the rest of the world
In the 1980s North Korea got hold of a series of Mercedes-Benz 190E (why do dictatorships always get Mercedes-Benz?), which they disassembled and remorselessly copied for create the Kaengsaeng 88.
Apparently the build quality of this copy of the 190E was so poor that a Yugo was like a Rolls-Royce by comparison. It is not known how many cars they made and even less, how many still circulate.
Years later they tried to make cars again facing the gallery, mainly with the help of the Moon Church. And nowadays, they are supposed to make cars from kits that come to them from China. One of those models looks curiously like a South Korean Kia Sorento… from a few generations ago.
But before deciding to build his own vehicles, Kim Il-sung I buy cars to the West. And that’s when Volvo comes into the picture.
“You give me 1,000 Volvo cars and I pay you in copper and zinc”
In 1974, Kim Il-sung, like any dictator, decides on practically everything that happens in his country. And that includes importing vehicles. Kim Il-sung needs to motorize a part of his subordinates of the Workers’ Party of Koreabut he is not going to give everyone a Mercedes S-Class either. Those are left for him and his closest collaborators.
For the rest of the game think of something that is just as robust, but more affordable.
The Volvo 144 GL seems to be the perfect car for this.. Not because of his intrinsic qualities, but because the Korean leader takes advantage of the greed and naivety of the Swedes.
And it is that in Sweden the figures of economic growth that North Korea publicly offers are believed at face value: without cutting a hair they have assured a few years ago, in the middle of the 60s, annual GDP growth of 25%.
Exchanging cars for minerals is not a priori the form of payment for a country with a 25% growth in its GDP
In the mid-1970s, Sweden is officially a non-aligned country, and thinks take advantage of this situation of neutrality to be able to trade with the communist countries or allies of the Soviet Union and thus achieve a market that other countries cannot access.
Thus, when Sweden receives an order for 1,000 units of the Volvo 144 GL from North Korea, they do not think about it and agree to the manufacture and delivery of the cars.
A bad idea.
North Korea had no foreign exchange, so would pay Sweden in copper and zinc that it would extract thanks to the Swedish machinery that other companies had provided to the Kim Il-sung regime.
Once those tons of copper and zinc were delivered to Sweden, the Scandinavian country could sell the merchandise on the free market and thus pay off its debt to Volvo, as well as pay machinery manufacturers such as Atlas Copco.
In addition, the forecasts of the economists pointed to a rise in the prices of these materials. What could go wrong?
A debt of 300 million euros
The reality is that the copper and zinc never reached Sweden, mostly because the mines weren’t even started. At first, Sweden tried to negotiate with the North Korean regime, because it was the most logical thing to do. But from 1976 they already realized that North Korea had no intention of paying for the cars.
Since then, Sweden has presented the invoice for the 1,000 Volvo 144 GLs to the North Korean government each year, each time adding the corresponding interest. Kim Jong-un, following in his grandfather’s footsteps, does not pay his debts or even deign to answer. The invoice of those 1,000 models already exceeds the €300 million.
Today these Volvo 144 GLs are still running like taxis in Pyongyang, the capital of North Korea. With them, a few citizens who can afford to take a taxi are able to move freely around the city.
After 40 years of service, it’s not bad as an advertising campaign that speaks volumes for Volvo’s quality at the time, even if the bill was so high. for Sweden.
Source: Motorpasión by www.motorpasion.com.
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