Kia Motors Corp., an affiliate of local industry leader Hyundai Motor Co. and the country's second-largest automaker, has been slapped with a 500 million won (US$427,200) fine for an unfair trade practice that was designed to work in favor of company-operated dealerships only, the antitrust watchdog said Tuesday.

According to the Fair Trade Commission (FTC), the automaker limited the total number of car dealers at all its contracted dealerships, mostly by refusing to provide sales identification numbers for new dealers.

Such a practice, introduced in 2006 at the request of company-operated dealerships, has effectively prevented fair competition between contracted and company-operated dealerships, the FTC said.

"A quota on the number of employees needs to be avoided as the quota itself may be illegal," a commission official said.

Along with the fine, the automaker has been ordered to immediately take corrective actions, the FTC said.