Ford has agreed to pay a record $10 million fine for unconscionable conduct over the auto giant's handling of complaints about faulty gearboxes in more than 10,000 Australian cars.

Key points: Ford's $10 million penalty is the highest fine handed out to a car company in Australia

Ford's $10 million penalty is the highest fine handed out to a car company in Australia The affected cars shuddered, jerked or lost power but some drivers were told it was their driving style

The affected cars shuddered, jerked or lost power but some drivers were told it was their driving style About 10,500 drivers could be entitled to a refund or replacement vehicle

The Australian Competition and Consumer Commission (ACCC) launched legal action against Ford last year after receiving complaints about Fiesta, Focus and EcoSport vehicles fitted with the "PowerShift" transmission.

The dual-clutch automatic gearbox was meant to improve fuel efficiency and provide smoother gear shifts when driving.

But thousands of drivers complained that their cars shuddered and jerked when accelerating, suddenly lost power or made a lot of noise.

"Despite knowing that shuddering was a symptom of the quality issues with the vehicles, Ford frequently told customers that shuddering was the result of the customer's driving style," ACCC chairman Rod Sims said.

"Ford knew that the symptoms of the quality issues with the vehicles were experienced intermittently, but required customers to demonstrate them on demand in the presence of a dealer in order for repairs to be undertaken."

About 75,000 Ford vehicles sold in Australia between 2011 and 2016 were fitted with the "PowerShift" transmission.

Complaints began to surface in late 2015, but the ACCC said in many cases Ford refused to offer a refund or replacement.

Drivers who wanted a new car were required to make a significant payment towards their replacement vehicle.

"Ford told consumers that refunds and replacement vehicles were not an option, when they may have been legally entitled to these remedies under the consumer guarantees," Mr Sims said.

"Buying a new car is a significant financial commitment and Ford's unconscionable conduct caused considerable distress and frustration to thousands of consumers."

Ford's $10 million penalty is the highest fine handed out to a car company in Australia.

Ford apologises for letting down customers

Ford has acknowledged it took too long to identify problems with the gearboxes, and vowed to make things right with its customers.

"Accepting the $10 million fine is the first action on our commitment to make right," Ford Australia chief executive Graeme Whickman said.

"We were overwhelmed with the volume of complaints and, while it was not intended, over a 10-month period our processes were inadequate and information provided was either inaccurate or incomplete.

"We let our customers down and for that we are sorry."

Under a deal struck by Ford and the ACCC — and approved by the Federal Court — the car maker will review complaints made by up to 10,500 customers between May 1, 2015 and November 1, 2016.

An independent auditor will assess whether those drivers are entitled to a refund or replacement vehicle.

The review process will commence in early July 2018 and run for 12 months.

Affected customers can register their details to receive updates on the independent review process.