Hundreds of cars lined up at the car terminal at Durban harbour. Picture: Supplied

Johannesburg - A possible strike in the automotive sector has been averted with the industry body and labour unions finally inking a three-year wage deal, it was confirmed this morning.

This comes after news emerged on Thursday that a deal was imminent.

The National Union of Metalworkers of SA (Numsa) and the Automotive Manufacturing Employers’ Organisation (AMEO) on Friday wraped up the deal, the industry association said on Friday.

Specific increases were not detailed in the statement, but Numsa yesterday said parties had in principle agreed on a 10 percent wage increase in the first year and 8 percent in each of the following two years.

AMEO says the deal also creates a plant-based housing solution that will seek to provide access to more housing for employees at the various manufacturing plants.

Motor manufacturers had indicated that a housing subsidy was a major cost issue for them and had offered a subsidy of R500 a month per employee.

Read also: Wage deal on cards for motor sector

AMEO says the “signing of this three-year wage agreement is a significant achievement as it marks the first time since 2007 and only the fifth time in the history of the sector’s collective bargaining process that it has been successfully negotiated without any disruption or work stoppages”

CEO of Nissan SA and president of the National Association of Automobile Manufacturers of South Africa, Mike Whitfield, says “the signing of our new agreement is testament to the value of proactive negotiations between AMEO and NUMSA”.

The negotiations were held amid trying times for the local automotive industry. New vehicle sales in South Africa have declined significantly over the past year and global export contracts remain exposed to a highly volatile local currency and increasing competition from other manufacturing hubs across Europe, the US, Asia and Africa.

Demands agreed on earlier this year at Numsa’s national bargaining conference to be put forward in different sectors included a 20 percent wage increase, a one year agreement, a R5 000 housing allowance and medical benefits to be paid on the basis of 80 percent by employers and 20 percent by employees.