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Models stand at Pyeonghwa Motors Corp.’s booth at an industrial fair in Pyongyang in May 2008. (Pyeonghwa Motors Corp) |
Pyeonghwa Motors Corp. has been a symbol of reconciliation between the two Koreas since the Unification Church unveiled its ambitious joint venture with the communist North in 2000.
Twelve years later, Tongil Group, the church’s colossal business empire, appears to be retreating from the partnership in favor of more lucrative, less risky sectors like retail and food.
Park Sang-kwon, president of the Seoul-based auto company, is seeking to cancel its license for economic cooperation with North Korea, the Unification Ministry confirmed. But officials said he has yet to submit relevant documents.
Park had reportedly looked to sell the firm’s plant in Nampo, South Pyongan Province, to the North Korean government for the same amount it invested, $200 billion. But then he changed his mind to handing it over for free in return for a new permit to run other businesses there.
Some speculate that the company may spur its forays into the lodging business. Park also serves as chief executive of Pothonggang Hotel in Pyongyang.
The shift comes as the North Korean capital is witnessing a spike in the number of sophisticated restaurants and the rise of the 20-something “marketplace generation” led by the offspring of those from higher up.
Founded by the late Rev. Moon Sun-myung in 1999, Pyeonghwa entered operation in 2002 on a site offered by the regime, churning out compact sedans with the technology from Italy’s Fiat and Chinese-designed trucks and sport utility vehicles.
The company marked the first-ever inter-Korean joint venture, with Tongil controlling a 70 percent stake. Its capitalization reached 43.5 billion won ($40 million) as of 2009.
With cross-border relations remaining sour and a new chief running the conglomerate, Tongil may be stepping up restructuring efforts to focus more on profits than ties with the North, observers said.
By Shin Hyon-hee (
heeshin@heraldcorp.com)
