North Korea – Volvo: the story of the big slate

North Korea – Volvo: the story of the big slate

This is probably one of the biggest defaults in automotive history. It is at least more interesting. Especially since the case is still ongoing, 48 years after the invoice was issued.

We are in 1974 and 김일성, better known as Kim-Il-Sung, the founder, supreme leader and eternal president of North Korea, decides to renew his car fleet. The dictator is a fan of mercedes and he already orders very few examples, too high for his personal needs, and those of a few high officials of the government who have his favor. But it is not enough to run a country where only a few Chinese or Russian trucks and services are moving around. So the president for life and “Teacher of all mankind”, when we are allowed to call him politely, he decides to order a fleet of cars from his closest bodyguards and embark on a major Korean car journey.

The intention is good. It remains to find a manufacturer who is willing to accept the order. Because North Korea has been under economic sanctions from the United States since the start of the Korean War in 1950. And since the United States’ allies are aligned with Washington, the choice of which manufacturer to import from is somewhat limited.

The interior is 144, but the model is not Korean.

Remain neutral countries. There are two of them: Switzerland and Sweden. The former having more financial than industrial talents, Koreans usually turn to the latter and set their sights on it Volvo. As soon as it was decided, it immediately took off: a message sent by Kim flew to Gothenburg to meet the leaders of the brand. Because the operation cannot be discussed in a simple showroom. The president for life wants to buy 1,000 Volvos. And not just the old ones: the green 144 GLs. The 144, is a large sedan of the brand, which launched 20 years of this square design that made the heyday of the manufacturer until the 90s. Excited by the wind, the bosses of Gothenburg are also cautious. Before shaking hands with the Koreans, they turn to their government, asking it to make sure. Above, the Cabinet supports.

46 years later, many Volvos are still driving in Pyongyang.

The cars are built and shipped to Pyongyang at the same time as an add-on: $37 million, or $37,000 per unit, which puts the first sedan at today’s mainstream compact price. The case. But the bill has not been paid. Months pass, and instead of paying, the Koreans ask for a Comecon agreement. This happy collection of post-war communist countries, dissolved in 1991, established a special mechanism for trade negotiations: they pay “non-brother countries” in exchange or in return. But nothing that North Korea offers the interests of Volvo, which turns to the Swedish government, which does not allow it to go. Here he is, in 1975, opening an embassy in Pyongyong that aims, among other things, to recover the money.

The debt is mounting and North Korea still refuses to pay

The following? The debt interest is increasing, and as of today 300 million dollars, Sweden still claims its right, the eternal president is dead, his son Kim-Jong Il succeeded him, his place was taken in 2011 by his grandson Kim-Jong Un. In Pyongong, the unpaid bills are passed down through inheritance and while many of the many green Volvo 144s are still running, they are unlikely to be paid off anytime soon, or replaced by other models. Volvo, like all its rivals, has learned the lesson.