Johannesburg - South Africa's car manufacturers are set to sign a new three-year wage deal with union Numsa on Thursday, union and industry officials told Reuters.

The deal will come as a huge relief to local carmakers, ending fears of labour unrest, especially since the previous two negotiations resulted in strikes.

A Numsa source said the deal would see workers receive a 10 percent pay increase in 2016 and an 8 percent increase in each of the following two years.

The most recent wage agreement (signed in 2013) expired on August 31 this year and strike fears were fuelled when Numsa entered this year's negotiations requesting a one-year agreement and 20 percent wage increase, a R5000 a month housing allowance and medical benefits funded 80 percent by the employer.

Currently the motor industry is South Africa's largest manufacturing sector, contributing 7.5 percent of the country's GDP in 2015.

SA currently has seven car manufacturers: BMW, Ford, General Motors, Mercedes-Benz, Nissan, Toyota and Volkswagen. China's BAIC is also set to establish a local plant in the Coega industrial zone following the recent signing of a R11-billion deal.

Sources: Reuters, Business Report

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