Hyundai and Kia feel the cost of overstating fuel economy figures

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Kia SoulPA

Korean giants Hyundai and Kia have admitted they have overstated fuel economy figures of their vehicles.

As reported by BBC News, the cases occurred in the USA - leading to both firms' shares plummeting by seven per cent

The two Korean brands have said they will compensate US owners who have been affected - estimated to be nearly 900,000 cars and at the cost of millions of dollars.

Speaking to Reuters, James Yoon, an analyst at BNP Paribas, said: "We believe this could be a game-changing event in Hyundai's success story.

"We now find improvements in brand perception at risk due to faulty mileage claims, which are at the core of the brand's success during difficult times.

"We think the potential financial loss is immaterial compared to the potential reputational loss of brand equity."

The US Environmental Protection Agency discovered the errors. Ranging from small models to larger ones, 13 Hyundai and Kia cars were affected.

The car firms said the cause of the problem were "procedural errors at testing facilities in Korea".

However, UK owners should not be worried about the news, Kia Motors UK has told AOL Cars.

"We're aware of the news and are on top of it," a Kia spokesperson told us. "Fuel economy testing in the USA is completely different to that in Europe.

"There is no direct correlation between testing in the USA and tests in Europe."

The spokesperson added Kia is not aware of any discrepancies in the EU.

"We've asked the questions and we're not aware of any errors."

Kia Motors UK said the errors in the USA had arisen in a specific test called the "coast down".

Hyundai and Kia models tested had fuel economy disprepencies of between one and six MPG.

"I cannot see how we could have moved more quickly and transparently to alert owners," added the spokesperson.