Used car prices have skyrocketed in the North Korean border city of Hyesan since smuggling operations were suspended in mid-May. Dealers are exploiting the supply shortage to jack up prices.
“Used vehicle prices have shot up recently in Hyesan because sellers with existing inventory are raising prices—no new vehicles have come in for over a month,” a source in Ryanggang province told Daily NK recently.
The price increases are substantial. Used cars that cost 70,000 Chinese yuan a month ago now sell for 85,000 yuan—a 15,000 yuan jump. Used trucks and vans have seen even steeper increases of 20,000 yuan over the same period.
“Importers who brought vehicles in just before the government halted smuggling, and the resellers who bought from them wholesale, are taking advantage of the import freeze to push prices higher,” the source explained.
This has created a difficult situation for buyers. “People looking for vehicles don’t know whether to buy now or wait for prices to drop. Given how expensive vehicles are, many people are reluctant to pay these inflated prices,” the source said.
But there are also signs of panic buying. Some buyers worry that no one knows when state-organized smuggling will resume, making them think now might be their last chance to purchase.
Inflated prices across the board
The supply crunch has also driven up car parts prices, with costs rising an average of 500 yuan over the past month.
Since U.N. sanctions prohibit North Korea from officially importing vehicles or parts, the country relies on organized smuggling operations. Vehicle smuggling has been a lucrative business along the Hyesan border, but the month-long suspension has inflated prices across the board.
“Vehicle parts cost anywhere from hundreds to thousands of yuan depending on the type. Most people in this business are donju because of the capital requirements. Car parts maintain steady demand even when prices rise, so donju selling parts are doing very well right now,” the source noted, referring to North Korea’s wealthy entrepreneurial class.
These disruptions in state-led smuggling create winners and losers. While some profit from the artificial scarcity, others face serious financial losses. Daily NK previously reported that some smugglers are in desperate situations because their money remains tied up in China.
