Although the desire for car ownership in North Korea has been on the rise due to increasing marketization, private ownership of vehicles remains difficult. However, residents are registering more and more privately purchased vehicles under the name of state enterprises.
“Recently, stories of people buying private cars can be frequently heard in Pyongyang, Pyongsong (South Pyongan Province), and the border regions including Sinuiju (North Pyongan Province) and Hyesan (Ryanggang Province). People with links to the hwagyo (ethnic Chinese) network, families of defectors, and entrepreneurs who have had success in the servi-cha (transportation and delivery services) industry are increasingly purchasing private cars,” a source in Ryanggang Province told Daily NK on February 7.
“Individuals can buy a car if the car’s owner is registered as the state enterprise the individual belongs to. The car owner makes an agreement with the head of the enterprise and receives the car registration number associated with the enterprise from the transportation department,” the source explained.
North Korea allegedly permits private ownership of cars by law (Civil Code Article 59), but in reality it is highly restricted.
Despite the fact that cars must be registered as the property of national organizations, the number of individuals seeking to do so is rapidly increasing. Private vehicles are considered a lucrative means of earning money as the servi-cha business, which represents an alternative form of freight transport to the unreliable railway network, is rising in popularity with marketization.
“In recent years, the transportation business has become more important as the markets develop. In particular, residents who have family members in South Korea are increasingly purchasing cars these days,” a source in South Pyongan Province said.
A defector who settled in South Korea 12 years ago added, “In the fall last year, my brother who lives in Chongjin City (North Hamgyong Province) asked for help in purchasing a cargo truck. I doubted whether anyone could own a private car in the North, but I heard that it’s actually possible if they register them under the name of a state organization, so I sent him 30 million KRW.”
A source in Sinuiju added, “Some residents who are trading with Chinese firms are trying to purchase cars. I also heard that there are even private taxis registered at the district car enterprises and bus offices in Pyongyang.”
Cadres are earning significant amounts of money as this trend continues. Each new car owner must bribe various officials including State Security Department officials who register the car in the name of the enterprise, the enterprise executives, and officials at various checkpoints who inspect all vehicles on the main roads.
“The owner of the car must pay 150,000 KPW to the enterprise for using their name and to make a working record, and also needs to pay 50,000 KPW each month to the Security Department for a license. In addition, they’ll have to pay more than 300,000 KPW in bribes for various reasons,” the source said.
Car ownership in North Korea is a complex process. As the regime cannot provide proper wages for its officials, bribery and corruption has become an integral part of everyday life.
