The talks, which involve the country’s leading automotive manufacturers, have reached a critical stage after Numsa rejected AMEO’s latest three-year wage proposal. Employers offered a 7 percent increase in the first year, followed by 5.5 percent in each of the following two years. Numsa dismissed this as insufficient, calling it a “below-inflation increase” that fails to reflect the rising cost of living faced by its members.

Numsa initially demanded a 9 percent increase in the first year and 8 percent in the second and third years but later softened its stance to 7 percent in year one and 6 percent in the subsequent two years. The union argues that the employers’ 5.5 percent offer for years two and three effectively amounts to a wage freeze, given the steep increases in electricity tariffs, transport costs and basic goods.

AMEO, representing the country’s major vehicle manufacturers, maintains that its offer already exceeds current inflation, which stands at around 3.4 percent, and balances workers’ welfare with the sustainability of the automotive sector. Employers have warned that excessive wage increases could threaten long-term viability, especially as the industry faces global headwinds, including reduced export volumes, rising input costs and increased competition from cheaper imports.

After talks deadlocked, Numsa secured a certificate of non-resolution from the Commission for Conciliation, Mediation and Arbitration, allowing it to issue a 48-hour strike notice if no agreement is reached. The union has indicated that it is ready to exercise this option should employers fail to improve their offer.

A strike could affect production at all major original equipment manufacturers (OEMs), including Toyota South Africa Motors, Volkswagen Group South Africa, Ford, BMW, Isuzu and Mercedes-Benz, as well as a wide network of component suppliers. The potential disruption comes at a time when the local automotive industry is already under pressure from slowing global demand, plant closures among component suppliers and job losses in manufacturing hubs such as the Eastern Cape and Gauteng.

Industry sources confirmed that Numsa and AMEO executives are expected to meet again towards the end of this week in a final attempt to resolve the dispute.