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Hyundai Motor Co and its affiliate Kia Motors Corp overstated the gasoline mileage for more than 1 million 2011-2013 model year cars in the United States and Canada, and will offer debit cards to customers to make up the difference.

The South Korean auto makers have submitted a plan to the U.S. Environmental Protection Agency for cars currently on dealer lots to be relabelled with new window stickers reflecting the corrected mileage estimates, the EPA said on Friday. The mileage on most labels will be reduced by one to two miles per gallon (approximately 0.3 litre/100 km), with the largest adjustment being a six mpg (1.4 litres/100 km) highway reduction for the Kia Soul.

"Consumers rely on the window sticker to help make informed choices about the cars they buy," Gina McCarthy, assistant administrator for EPA's Office of Air and Radiation, said in a statement. "EPA's investigation will help protect consumers and ensure a level playing field among auto makers."

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The South Korean auto makers said the changes will result in the 2012 Hyundai-Kia fleet fuel economy level being reduced by an average of 3 per cent, to 26 mpg from 27 mpg.

Hyundai and Kia in joint statements released in the United States and Canada said about 900,000, or 35 per cent, of 2011 to 2013 model year vehicles were affected in the U.S. market, along with about 172,000 automobiles in Canada.

"I sincerely apologize to all affected Hyundai and Kia customers, and I regret these errors occurred," W.C. Yang, chief technology officer of Hyundai/Kia research and development, said in a statement. "Following up on the EPA's audit results, we have taken immediate action to make the necessary rating changes and process corrections."

The auto makers also said they are putting in place a reimbursement program for affected current and former vehicle owners to cover the additional costs associated with the fuel economy change. Customers will receive a debit card that will reimburse them for the difference in the EPA fuel economy rating, based on the fuel price in their area and their miles driven.

An extra 15 per cent to the amount will be added to acknowledge the inconvenience and owners will be able to refresh their cards for as long as they own their vehicles, the companies said.

"We're extremely sorry about these errors," John Krafcik, president and chief executive of Hyundai Motor America, said. "When we say to Hyundai owners, 'We've got your back,' that's an assurance we don't take lightly. We're going to make this right for everyone, and we'll be more driven than ever to ensure our vehicles deliver outstanding fuel economy."

Hyundai and Kia said procedural errors at the companies' joint testing operations in Korea led to the incorrect fuel economy ratings. The EPA said regulators found discrepancies between agency results and data submitted by the auto makers.

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*****

Affected vehicles

Hyundai

2013 models: Accent, Elantra, Elantra GT, Elantra Coupe, Veloster, Genesis, Tucson, Tucson AWD, Santa Fe, Santa Fe AWD

2012 models: Accent, Elantra, Genesis, Sonata Hybrid, Tucson, Tucson AWD, Veloster

2011 models: Elantra, Sonata Hybrid

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Kia

2013 models: Rio, Soul, Sportage, Sportage AWD, Sorento, Sorento AWD

2012 models: Rio, Soul, Sportage, Sportage AWD, Sorento, Sorento AWD, Optima Hybrid

2011 models: Optima Hybrid

***

Example
A 2012 Hyundai Elantra owner who drives 20,000 km per year would pay $1440 per year for gas (assuming a price of $1.20/litre), based on a fuel economy rating of 6 litres/100 km.
At a corrected rate of 6.3 litres/100 km, the same driver pays $1512 per year for gas.
The difference is $72, plus an extra 15 per cent, for a rebate of $82.80.

* For illustration only, actual amounts will vary.

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