People are comfortable buying and selling cars.
Unlike information about a closed Korea, both inside and outside, Ms. Vu Nam Phuong (a member of the Vietnam-Korea Friendship Association) said she was impressed when she arrived in this country in 2013.
Street in the capital of Pyongyang is wide and airy, but there are times when traffic jams occur. The old cars are very cheap, especially for Japanese and Volvo cars and Japanese brought by the Kieu dynasty many years ago. Since she started working in Korea, people were comfortable buying and selling cars without money.
Highway road clamp with long lines of cars lined up in Pyongyang, Korea. (Clip: Vu Nam Phuong)
For a long time Korea distinguished civilian cars with white plates, but after 2016 it changed to the blue sea like China. The Red Sea is a military vehicle and the Yellow Sea is a state vehicle.
Currently, in addition to domestic car Sungri, Pyeonghwa, Seongyang, Neanara, the Trang Tien car market is also attended by Chinese entrepreneurs, accompanied by BYD or FAW car manufacturers.
Cars are not included in the embargo list, so they can be imported from any country, but Korean banks banned from international payments are the biggest barrier to entry.
The applicable car import tax is 20%. Korea has no shortage of new Mercedes-Benz or Audi sports cars, which are German luxury cars that are very popular in this country. Most of them are imported via Chinese roads, many European cars have Chinese characters because they are sold on the mainland.
Korea does not charge consumers, so there is no consumption tax. When buying a new car, in addition to buying a relatively cheap car (separate price for Koreans), only 1 million KPW – Korean won (about 21 million VND), the remaining vehicles for wheelchairs are about 10- 20% of the value of the vehicle, including environmental money, construction of roads and bridges, insurance, registration.
Mrs. Vu Nam Phuong does not buy cars directly because the price for foreigners is not cheap ($ 10,000), but she and her Korean friend will buy a used car, the procedure is quite simple, just need handwriting paper and then goes to the Commission. Committee of the people of the authenticated wing.
Korean law now allows cars to be privately owned, but with the exception of domestic showrooms scattered in major cities, there is also a Chinese dealer. Some Korean taxi companies use new Chinese cars, which is not uncommon.
Cars are cheap but … absent
Previously, Pyeonghwa had sold its shares to Sangyang (Korea) to produce cars, but after 2012 everything stopped because of the embargo. Therefore, Korean car production, although the factories are designed with a capacity of tens of thousands of vehicles per year, is actually sent only a few hundred vehicles (according to some unofficial reports).
In theory, only 1 million KPW equivalent to 120 USD (converted value for people, 1 USD = 8,300 KPW) is able to buy a shiny domestic car. Practically not everyone can easily buy.
According to Mrs. Vu Nam Phuong, with non-civil servants, military workers working in private companies have an average income of $ 74 / month, with foreign companies at least $ 150, eligible to buy car. But these people do not enjoy government subsidies, so the cost of living will be higher. In addition, due to sanctions and difficulties in fuel supply, oil is limited.
Each civilian car can only buy 15 kg of fuel per month (about 21 liters), administer by ticket in the transport department and get it by mail, every time it receives 12 months. So, even with cars, travel is not easy due to strict management policies.
In Korea, oil problems are easily accessible only if buyers are foreign missions or diplomatic organizations, not limited to the number of purchases.
Meanwhile, public transportation is quite affordable and cheap. Phuong said the one-year public walking card amounts to only 1 liter of gasoline. Then people will have less need to buy cars.
Everything is about to change. North Korea earlier this year allowed foreign oil trade and some Chinese companies promoted to seize this opportunity. This can be a lever to boost the Korean auto market.
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