Renault Samsung Motors, which saw first half global sales plunge 29.3% to 58,705 units and domestic sales tumble 14.2% to make it the nation’s smallest car maker behind SsangYong, has agreed a new pay deal with its union after 12 rounds of talks.

The deal, reached at the beginning of the week some 45 days after the union authorised action against the company, freezes wages with both sides reported to recognise the difficulties RSM faces.

Instead of a pay rise, workers will receive a bonus of between KRW500,000 (US$438) and KRW1m when production targets are reached. The company has also agreed to maintain its welfare system and stabilise the two shift system at its Busan plant.

RSM has also earmarked KRW10bn to upgrade Busan. Union members are expected to vote on the agreement this week.

“The agreement was reached under a vision that both sides want to bounce back from the difficult situation,” said an RSM official. “If the agreement is approved in the union’s vote, we will finalise the process quickly.”

One area of controversy in the negotiations was a proposal by RSM that workers use 22 days of vacation when the production lines were idled as a way of reducing costs. The union objected on the grounds that this undermined the freedom to use holiday time when employees wanted it. This has now been modified to 18 days.

Meanwhile, in a bid to reverse falling sales, RSM has, since 1 April, been offering buyers of the rival Hyundai Avante, Kia K3 or Chevrolet Cruze models the chance to trade in their used car for a new SM3 – the price difference between those cars and the SM3 is estimated to be about KRW3m (US$2,600).