In a story that sounds almost fictional but is entirely real, North Korea once ordered 1,000 Volvo cars from Sweden in the 1970s, and never paid for them.
Decades later, the debt remains outstanding, becoming one of the most peculiar cases of international trade gone awry.
This incident not only highlights the risks of doing business with isolated regimes but also reflects a broader history of strained relations between the West and North Korea.
The Background
In the early 1970s, North Korea was eager to modernize. Under the leadership of Kim Il-sung, the regime launched economic initiatives that included infrastructure development and increased international trade, especially with Western countries.
At the time, Sweden, along with a few other nations, was among the first Western countries to establish diplomatic relations with Pyongyang.
Hoping to benefit economically and diplomatically, Sweden agreed to trade deals with North Korea. One of the most notable of these agreements was the export of Swedish-made Volvo 144 sedans.
Volvo, one of Sweden’s most prominent manufacturers, entered into a contract to deliver around 1,000 cars to North Korea in 1974. The deal also reportedly included heavy machinery and mining equipment, totaling around 600 million Swedish kronor.
Cars Sent but Payments Never Arrived
The cars were delivered as agreed, and North Korea received the shipment of Volvo 144s, which were seen on the streets of Pyongyang in the years that followed.
The vehicles were used as taxis and government fleet cars, recognizable by their distinctive 1970s European design. But despite receiving the goods, North Korea never followed through with the payments.
Swedish officials waited for the expected financial transfers, but none came. Repeated requests for payment were either ignored or met with vague promises. Over time, it became clear that North Korea had no intention of settling the bill.
Sweden’s Response
Sweden didn’t simply forget the incident. For decades, the Swedish Export Credit Agency has recorded the debt, which with interest has ballooned to well over 2.7 billion kronor (more than 300 million USD today, depending on the exchange rate).
The debt has become somewhat of a bureaucratic routine: every year, Sweden formally sends North Korea a payment reminder, even though no reply is ever received.
Despite the diplomatic embarrassment and financial loss, Sweden has opted not to take legal or aggressive diplomatic action.
This cautious approach is partly due to Sweden’s unique diplomatic role: it has served as the protecting power for the United States in North Korea since 1995, providing consular services in lieu of U.S. representation.
As such, maintaining some degree of engagement with Pyongyang has taken precedence over escalating a decades-old debt dispute.
The Cars Are Still on Pyongyang Streets
Remarkably, some of the Volvo 144s are reportedly still seen in North Korea today, nearly 50 years later.
The vehicles serve as a strange symbol of a failed transaction that has become legendary in international trade history. Their presence is a living reminder of a debt never paid and a partnership that never worked.
For Volvo, the incident serves as a cautionary tale in corporate history. For Sweden, it remains a diplomatic oddity, an open file in their national accounts and a symbol of the complexity of international relations with closed regimes.
