North Korea has temporarily suspended the smuggling of used cars from China’s Yanggang Province since early June, according to a source close to provincial authorities. The suspension comes as the number of unsold cars parked on roads surged due to lengthy clearance processes, the source told Daily NK.
Despite the halt, numerous cars remain lined up in public spaces, including plazas in front of Hyesan’s art theatre, cinema, and Hyesan Hotel. The vehicles can only be sold after approval from the Ministry of Social Security and the Cabinet. This involves recording the car number and registration by the Ministry, followed by the Cabinet’s screening of the car’s make, color, and affiliated agency.
The slow approval process, taking around 10 days, has become a significant bottleneck. This delay frustrates importers who face mounting interest payments and risk falling into debt. “People smuggle used cars in partnership with trading companies. After obtaining a trading license and importing the cars, they sell the vehicles and share the profits,” the source explained. However, the high costs of importing each vehicle often necessitate borrowing money, compounding financial pressure when sales are delayed.
The costs associated with importing used cars into North Korea are substantial. The base price of a used car is approximately RMB 45,000. Additional costs include trading licenses at around RMB 30,000 per vehicle and personnel costs for transportation from China to North Korea, amounting to RMB 2,500. In total, the cost to import a single used car reaches about RMB 77,500.
Importers expected the registration process to take around five days but have been dismayed by the extended timeline. “They now need about RMB 300,000 to manage the job, making importing used cars prohibitively expensive except for the state or the wealthy,” the source said.
Once the backlog of parked cars is cleared, state-led smuggling is expected to resume. However, given the current circumstances, the price of used cars is likely to rise, the source concluded.