Chennai: In a deal being hailed as one of the most generous in India’s automobile sector, Hyundai Motor India Limited (HMIL) has inked a three‑year wage settlement with its workers’ union that includes a salary increase of ₹31,000 per month. The Long Term Settlement (LTS) covers the period from April 1, 2024, through March 31, 2027, and applies to nearly 1,981 employees in the technician and workmen cadre—which represents about 90 per cent of that category at the company’s Sriperumbudur plant.
Under the agreement with the United Union of Hyundai Employees (UUHE), the pay hike will be phased in over the three years in a ratio of 55 per cent in the first year, 25 per cent in the second, and 20 per cent in the final year. In addition to the salary boost, Hyundai has committed to enhanced welfare measures—comprehensive health coverage and wellness programmes—to improve employee well‑being.
Market Response and Implications
Investors welcomed the announcement. The company’s shares hit record highs following the wage pact, rising by around 2‑3 per cent as markets factored in strong labour relations and improved employee satisfaction. Analysts see this move as strengthening HMIL’s position in the Indian auto industry, underlining its reputation for maintaining a stable workforce and avoiding protracted labour disputes.
At a time when global supply chains and automotive firms are under pressure from rising input costs and shifting labour expectations, Hyundai India’s settlement could become a benchmark for peer companies. For employees, the deal brings relief and recognition; for the company, it may mean higher wage bills, but also potentially better productivity, morale, and lower attrition.
Hyundai’s move also aligns with increasing expectations among Indian industrial workers for more substantial compensation, especially given inflationary pressures and rising costs of living. If management elsewhere in the sector responds with similar wage revisions, India could see a new normal in labour costs. However, cost pressures for OEMs (original equipment manufacturers) and suppliers will likely increase, which may affect pricing, margins, and negotiations in the supply chain in the months ahead.