South Korean automaker Hyundai discovered the miscalculations on engine power a few months ago after the Canadian government questioned the horsepower on the Elantra compact car. The Korean automaker advertised the Elantra as having 140 horsepower, but after reevaluation Hyundai discovered the figure was actually 135.

"Horsepower was misstated and I think we're obligated to come forward and correct the record," Hyundai of America Chief Executive Officer Finbarr O'Neill told reporters. "It has no impact on the safety or reliability of the vehicles."

Kia spokesman Kim Custer told Reuters that his company found out about the power ratings from Hyundai a few days ago. A review of its power ratings over the past seven model years found no other inaccuracies, he said.

Hyundai said that the owners or lessees of more than 400,000 vehicles whose horsepower ratings were overstated by more than 4 percent will be compensated. The compensation will include roadside assistance coverage or extended warranties.

O'Neill said that Hyundai misstated the ratings because the actual horsepower figures changed between the time the vehicles were first tested and the time they went on sale.

At other times, new equipment fitted to the vehicle to cut emissions reduced the horsepower, but the ratings were not changed, O'Neill said. For example, in the worst case, Hyundai overstated the horsepower on the Hyundai Sonata with a 2.0 liter engine by 9.6 percent. The Sonata's horsepower rating fell to 125 hp, but marketing materials continued to advertise the rating as 137 horsepower.

The figures on more than two dozen models and variants were overstated going back to the 1992 model year, Hyundai said, with an average overstatement of 4.6 horsepower on a sales weighted basis. Two vehicles had their horsepower figures understated.

"These errors had occurred because we didn't have established procedures in place to verify that our preliminary horsepower figures matched the actual horsepower," O'Neill said. He said that Hyundai's director of engineer and design analysis will ensure that actual horsepower numbers match marketing materials in the future.

Under the compensation plan, those with vehicles from the model year 1999 and earlier will be given for free five-year roadside assistance coverage. Those who bought vehicles since the 2000 model year will be offered one of three enhancements - roadside assistance for 10 years and unlimited miles instead of five years with unlimited miles; or bumper-to-bumper warranty for six years or 72,000 miles instead of five years or 60,000 miles; or for original owners a powertrain warranty of 12 years or 120,000 miles instead of 10 years or 100,000 miles.

Kia will offer its customers a choice of additional warranty coverage or an extension of their 24-hour roadside assistance plan.

O'Neill said that, except for the Canadian government, no one had complained about the horsepower ratings.

Hyundai said that it will send letters to affected owners over the next few weeks. The company declined to specify the costs of the program.

Hyundai is just the latest automaker to overstate a car's horsepower. Jaguar, the British luxury carmaker owned by Ford Motor Co. , said its new 2003 S-Type R sedan had 400 horsepower. The problem was that the S-Type R gets 400 hp according to the European measurement for horsepower, but only 388 hp for the American measurement from the Society of Automotive Engineers.