Hyundai Motor and affiliate Kia Motors now face a US$775m class-action lawsuit in California for false advertising.

According to South Korea's Chosun Ilbo, the two Korean automakers had immediately announced compensation for customers after the US Environmental Protection Agency announced earlier they overstated the fuel efficiency of 1.07m cars but that was apparently not enough to head off a flood of lawsuits.

A law firm that specialises in class-action lawsuits is handling the latest case.

Small-scale lawsuits have already been filed against Hyundai and Kia in the USstate of Ohio and in Ontario, Canada.

Seattle-based firm Hagens Berman said it had filed a $775m compensation suit in a Los Angeles court on behalf of 23 consumers who say they lost money due to the false claim.

The firm has filed huge class-action lawsuits against Enron, Exxon Mobil, Boeing and other major US companies.

Rob Carey, an attorney at Hagens Berman, said the compensation plans offered by Hyundai and Kia were merely attempts to "shirk financial responsibility".

A Hyundai spokesman said, "The present compensation programme is the fastest way to resolve the problem. We don't expect major problems in the US."