GENERAL Motors, Toyota and competing car makers have agreed to raise workers' pay by 10 percent this year, ending an eight-day strike.
Wages would be increased by another 9 percent in 2011 and 2012, the Pretoria-based Automobile Manufacturers Employers Organisation said on Friday. Workers would return to their jobs tomorrow, the National Union of Metalworkers of South Africa (Numsa) said separately.
The union, representing 31 000 employees in South Africa's car industry, began the strike on August 11.
The seven-member car makers group estimated the walkout had caused a production loss of about 17 000 cars.
The union had sought a 15 percent raise, more than double the 7 percent the employers offered.
South Africa's inflation rate was 4.2 percent in June.
"It's become a trend, not necessarily a good one from an economic point of view, for settlements in the double-digit region, and that's way above inflation," Chris Thexton, the chairman of the employers' group, said. "There's a high premium in this contract. It allows for the industry to get back up and running."
Transnet gave workers an 11 percent increase in May to end an 18-day strike that crippled exports.
Numsa said earlier on Friday that workers at petrol stations, car-part makers and tire manufacturers might strike after wage talks collapsed.
Wages made up 10 percent to 20 percent of auto manufacturers' costs, Thexton said.
The car makers also agreed that as of January 1 they would stop using companies known as labour brokers that provide contract workers.
The employers would extend medical, pension and other benefits to short-term employees, the union said.
South Africa's car and car-parts industry accounts for about 6 percent of gross domestic product and is the country's biggest manufacturing exporter. The industry, which added 427 jobs in the second quarter for a combined workforce of 31 784, is one of the few that are creating employment. The economy shed 61 000 jobs in the period, pushing the unemployment rate to 25.3 percent, the highest of 62 countries tracked by Bloomberg.
Domestic vehicle sales returned to growth in January after contracting every month for 30 months.
BMW, the world's biggest maker of luxury cars, lost production of 2 000 vehicles because of the strike and probably would not be able to meet export targets this month, said Guy Kilfoil, a South African spokesman for the Munich-based company in.
"There is no way we will meet our export commitments for the month," Kilfoil said in an e-mailed response to questions.
"Whether we can meet our export targets for the full year is also questionable."
General Motors, which shut its main assembly lines at the Port Elizabeth plant because of the strike, would resume full output on August 23, the company said.
"While the dispute had been resolved, much work lies ahead to ensure that the industry becomes more competitive in order to ensure its longer term survival," it said.
"Industrial action like this affects the viability of the industry." - Bloomberg