Brazilian tax cuts for automakers translated into sales gains in early January, said the National Motor Vehicle Dealership Association, Fenabrave, late Monday.

Brazil sold 9.15% more cars and trucks in the first two weeks of January when compared to December. Automakers like Fiat (FIAZY), Volkswagen (VLKAY) and General Motors (GM) sold 94,547 vehicles total.

However, sales are 1.22% lower than they were in the first two weeks of January 2008, when cheap credit was flooding Brazil and consumers rushed to buy new cars.

The breaks were slammed on that car buying frenzy in October, once local banks quickly raised rates and cut term payments in response to the ongoing, worldwide credit crisis.

The government offered a reduction on the IPI industrial products tax for automakers, in order to entice buyers to market once again.

Car makers cut prices by as much as 7% for some vehicles, leading to the rise in sales.

Car makers in Brazil, seen as a relief for the international car companies who have been seeing a sales slump in the U.S. and Europe for a year now, expect 2009 sales to remain stable after three, record-breaking years.

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

Click here to go to Dow Jones NewsPlus, a web front page of today's most important business and market news, analysis and commentary. You can use this link on the day this article is published and the following day.