Management and unionized workers of South Korea's top automaker Hyundai Motor Co. reached a tentative wage deal on Tuesday, averting a labor strike for the fourth consecutive year.

The two sides agreed to a 98,000 won ($74.80) increase in basic monthly pay, the construction of a new electric vehicle (EV) factory in South Korea and more new hires, among other things, during their 16th round of negotiations held in Ulsan, some 310 kilometers southeast of Seoul.

It marked the fourth consecutive year that the two parties have reached a wage deal without a labor strike.

The deal will be finalized when unionized workers approve of the plan in a vote scheduled for next Tuesday.

Hyundai will begin the construction of an EV factory next year, with a goal to start production in 2025, according to the agreement.

It would be the first construction of a car plant in South Korea by Hyundai since 1996 when it built one in Asan, 87 kilometers south of Seoul.

Also agreed during the Tuesday's negotiation was offering a bonus of 200 percent of a worker's monthly salary plus 4 million won and 20 Hyundai Motor shares per person.

The automaker will also renovate aged domestic factories in a phased manner, and upgrade production facilities to boost productivity and improve working conditions.

"Together with the plan announced in May to build an electric vehicle factory in Georgia, the United States, building Hyundai's first EV factory in South Korea will help us respond to global EV demand more proactively," the company said in a press release.

In tandem with the capacity expansion plan, Hyundai said it will hire more skilled engineers and production workers. Details will be worked out by the end of November, the company said.

The agreement came as Hyundai Motor's sales dropped 7.6 percent to 1,877,193 units in the first half of this year from 2,031,185 units during the same period of last year amid a global chip shortage.

Labor strikes plagued the country's biggest carmaker for decades. Still, Hyundai and the union reached wage deals without strikes for the past four years amid a trade dispute with Japan in 2019 and the COVID-19 pandemic from 2020-2021.

In 2020, the company and its union agreed on a wage freeze due to the pandemic. It was the first wage freeze in 11 years following the 1998 Asian financial crisis and the 2009 global financial crisis.

Last year, management and labor reached an agreement on a 75,000 won increase in basic monthly pay, a bonus of 200 percent of a worker's monthly salary plus 3.5 million won, 2.3 million won in performance-based benefits and five Hyundai shares per person. It, however, rejected the union's demand to extend the retirement age to 64 and reinstate fired workers.

Hyundai rejected the same demand again this year. (Yonhap)