South Korean church to end car venture with North: source

Tue Nov 27, 2012 4:47am EST
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By Ju-min Park

SEOUL (Reuters) - 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 SpA 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.

Sun Myung Moon, 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.

"The Unification Church's Moon made a will to give back the auto business with the North before he passed away. It is not because its business wasn't doing well," said the source.

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.   Continued...

Reverend Moon Sun-myung, head of South Korea's Unification Church, takes part in the awards ceremony after the 2007 Peace Cup Korea final soccer match at the World Cup Stadium in Seoul in this July 21, 2007 file photo. REUTERS/Jo Yong-Hak/Files