Kia Motors Corp., South Korea's second-biggest automaker, rose in Seoul trading after the company reached a tentative wage agreement with workers, averting a strike for a second straight year.
Kia is set to join GM Korea Co. and Ssangyong Motor Co. in reaching accords with workers on wage increases for this year before the industry's summer break starts at the end of this month.
GM Korea agreed to raise the base salary by 4.7 percent and give a record bonus after the automaker posted its first annual profit since 2007.
"Avoiding a strike is especially positive as the company has low inventory to meet demand while Japanese rivals are normalizing output rapidly after the earthquake," Suh Sung Moon, an analyst at Seoul-based Korea Investment & Securities Co. who rates the company's stock a "buy," wrote in a note to investors today.
The accord includes a 5.2 percent monthly salary increase, an annual bonus equal to three months' pay and an additional 7 million won ($6,662), Seoul-based Kia. Workers will also get 80 Kia shares each, it said.
The agreement is subject to a vote by workers on July 27, the company said.
Hyundai Motor Co., the country's largest carmaker, which owns 34 percent of Kia, is still negotiating wages and working conditions with employees.
Kia's first-half sales rose 25 percent to 1.24 million units from a year earlier as it sold 30 percent more overseas, the company said July 1.
Kia shares advanced 2.5 percent to 76,900 won as of 1 p.m. on the Korea Exchange, compared with the benchmark Kospi index gain of 1 percent.