Koreas’ sole venture may close after Moon’s death

Koreas’ sole venture may close after Moon’s death

SEOUL - Reuters
Koreas’ sole venture may close after Moon’s death

Moon Sun-myung, head of South Korea’s Unification Church, died in September.REUTERS photo

One of the more bizarre joint ventures in car-making is set to come to an end following the death of the head of South Korea’s Unification Church which it is to give its stake in the Pyeonghwa Motors operation to North Korea.

Pyeonghwa, which produces models based on ageing Fiat designs as well as those of Brilliance China Automotive Holdings, is the sole carmaker in isolated North Korea, although few of its impoverished citizens are able to afford its products.

“Pyeonghwa Motors’ South Korean side is planning to pull out from the joint automaker and donate its 70 percent stake to the North,” said a source familiar with the transaction, who declined to be identified due to the sensitivity of the issue.

Spokesmen for the church were not immediately available for comment.

1,000 cars a year

Moon Sunmyung, the founder of the Unification Church and a sprawling business empire, died in September aged 92. He was born in what is now North Korea.

The church’s joint venture with North Korea, set up in 2002, was one of the few to survive a freeze in relations between the North and South following the shooting of a South Korean tourist in 2008 by North Korean troops.

Pyeonghwa produces about 2,000 vehicles a year, according to the source, in a country where most independent estimates say that gross domestic product per capita is less than $2,000. Other estimates put Pyeonghwa’s output at 1,000 cars a year or less.