With a 26% market share and a wildly popular entry vehicle in its portfolio, Volkswagen looks like it is ready to take Fiat out of the running as Brazil's leading car brand in 2009.

Overall, Brazil sold 214,130 cars in March, up from 155,482 in February, the National Motor Vehicle Dealership Association, or Fenabrave, said Friday.

Of the total, VW's Gol represented slightly more than 13% of the top 50 car names sold in Brazil. In addition, Gol sales rose 32.4% on the month in March to 27,899 units.

The Gol is a low cost subcompact car designed in Brazil. It sells for around 26,000 Brazilian reals, or $11,818, and comes in two different styles, a two door or the four door NovoGol hatchback.

The success of the Gol models is likely to give VW market leader status this year, industry analysts said.

The government also provided some lift to car sales when it extended a temporary tax break scheduled to end on April 1 to June, with talks of possibly keeping car makers exempt of the industrial production tax all year.

Last year, Volkswagen sold 526,070 cars compared to Fiat's 557,004. In 2007, Volkswagen sold around 489,600 units compared to Fiat's 523,100 cars, according to the Brazilian Motor Vehicles Manufacturers Association, or Anfavea.

Volkswagen overall car sales, across all its makes, rose 12% in February. Fiat's sales rose just 1%. Other major domestic names, including General Motors (GM), saw sales declines.

Anfavea figures on car sales come out on Monday.

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