Used car smugglers in Hyesan are growing increasingly frustrated over mounting debts caused by Chinese sellers charging excessive prices for vehicles.
“Large cargo trucks carrying used cars have been arriving in Hyesan recently,” a Daily NK source in Ryanggang province said recently “However, more smugglers are taking losses because the Chinese dealers are demanding inflated prices for their vehicles.”
According to the source, North Korean smugglers involved in state-sanctioned smuggling typically import used cars costing between 100,000 yuan ($15,600) and 200,000 yuan ($31,200) each, but end up selling them in North Korea for 20,000 yuan ($3,120) to 30,000 yuan ($4,680) less, frequently operating at a loss.
One smuggler who imported a used car from China for 200,000 yuan ($31,200) last month was forced to sell it for just 175,000 yuan ($27,300), taking a 25,000 yuan ($3,900) hit. When the vehicle arrived, it was in such poor condition that no one would pay the full price, forcing him to cut his losses and sell it for significantly less.
Since smugglers pay for the cars in advance, they bear all the financial risk, the source explained.
“The Chinese traders receive payment first and then purchase the vehicles, but they’re making outrageous profits by delivering cars in terrible condition,” the source said. “In the end, the Chinese traders pocket the profits while the smugglers who paid upfront take all the losses.”
“With the Chinese taking so much money, car smugglers are frustrated and complaining that they can’t continue doing business while suffering such losses,” he added.
Even when car smugglers want to work with new partners, they face significant bureaucratic hurdles because they need state permission.
“Since car smuggling currently operates under state approval, you can only deal with Chinese traders who have been authorized by the government,” the source explained. “Smugglers can’t easily switch partners because it takes over a month for the state to approve a new trader.”
Chinese dealers are well aware of this constraint and exploit it to maintain leverage over North Korean traders. “The problem is that the Chinese fully understand our situation and don’t hesitate to engage in unethical business practices,” the source said.
“A Hyesan smuggler in his 40s complained that he can’t sleep at night, thinking it might be better to just quit since he’s losing tens of thousands of yuan due to Chinese traders charging absurdly high prices for cars—even though he won’t face consequences since it’s state-sanctioned smuggling,” the source revealed. “People are angry, but many smugglers feel helpless because there’s no solution to the problem.”
