Workers at Volkswagen's Mexico plant, where the popular new Beetle and Jetta cars are made, will go on strike on Friday, after rejecting the company's offer of a 4% pay rise, the union said.

The workers will down tools from 11am (1600 GMT), after voting late on Thursday to reject the pay offer, Reuters said.

Volkswagen Mexico said in a statement that the labor ministry would call both sides to talks to seek a solution. About 9,700 union workers at Volkswagen's Puebla plant are demanding an 8.5% salary increase.

Reuters noted that Volkswagen is among the biggest car exporters in Mexico along with DaimlerChrysler and General Motors. Its Puebla plant produced around 300,000 cars in 2005 and its target is to increase that to 350,000 units this year.

"The offer was not enough. Tomorrow at 11 o'clock we'll put up the strike banners," union spokesman Miguel Angel Galan told Reuters late on Thursday.

The decision to strike was reached by a narrow margin of 54% in favour and 46% against, the report noted.

Two years ago, union workers at the plant walked out in a four-day strike that ended with a 4.5% wage increase plus benefits, Reuters added. Another strike in 2001 lasted 18 days before the two sides reached agreement.