Hyundai-Kia will concentrate on norther Europe in the second half of 2012, Kia's vice chairman said.

"We have decided to overhaul our second half (H2) strategy for the European market as the debt crisis from the peripheries start to spread and affect the real economy,' said Lee Hyung-keun told Maeil Business Newspaper. "We will boldly retreat from low-potential markets and concentrate our efforts in Germany, the UK, and Scandinavian countries."

Previous strategy was to try for stable across-the-board growth across Europe. The newly revised plan will take a different approach as the company selects and concentrates its resources only in promising regions.

Vice chairman Lee last month completed a tour around Europe during which he observed ground conditions at the epicenter of Europe's woes.

"Conditions in Europe are much worse than we had thought," said Lee. "Auto sales are slowing even in Germany, which had been the only buoyant market in the region. As the market makes a turn for the worst, we need to draft a new strategy."

Until May, Hyundai and Kia had been formulating aggressive sales strategies aimed at achieving high growth in all regions within Europe. This had allowed Hyundai and Kia to post high growth of 15.7% as of May this year, despite the 7.3% year on year decline in Europe's overall auto sales.

"We were fortunate to see such thriving performances in the first half but the market will become even harsher in the second," warned Lee.

Europe's auto markets are starting to totter as the German market, which had been withstanding the crisis, started to go downhill in May. Meanwhile, auto sales in France and Spain are falling at an even more rapid pace.