Brazil car sales are on the upswing again in March, rising 8.33% in the first two weeks of the month over the same period in February, dealership association Fenabrave said Wednesday.

Brazil car and light truck sales totaled 118,414 units, up from 109,310 units in the first two weeks of February. Sales were also 5.31% higher than they were at the same period last year, at a time when credit was plentiful and Brazil's economy was just a couple months away from investment grade status.

Times have changed since then, with the local economy seeing back-to-back quarters of negative economic activity.

However, a government decision to cut the industrial production tax on car makers has resulted in lower prices for new cars. In some cases, car prices have declined as much as 7.4% due to the temporary exemption of the IPI industrial tax.

That tax is expected to return in April, but automakers are trying to convince the government to keep the exemption in place.

Volkswagen's popular Gol models, both the new four-door sedan and the traditional two-door hatchback entry vehicle, remain strong sellers.

Volkswagen sold 33.44% more Gols in the first two weeks of the month, or 13,272 units, beating VW's yearly average over the two week period of 11,089 cars.

Gol's sale price is about 27,300 Brazilian reals, or $11,921.

Fiat's Palio and Uno models were selling 23% and 17% more respectively, while the Chevrolet (GM) Celta sedan was selling 12.11% less to 4,807 units sold. GM normally averages around 4,540 Celta sales in the first two weeks of the month, making March better than normal despite the decline from February.

"Gol continues to be a phenomenon for Volkswagen and it helps carry a lot of the national car sales figures," said Sergio Reze, president of Fenabrave.

-By Kenneth Rapoza, Dow Jones Newswires, 5511-2847-4541, kenneth.rapoza@dowjones.com