Brazil vehicle sales sink 36 pct in January-source

* Sales in January reached 230,285 units, source says

* Volkswagen topples Fiat as market leader in January

SAO PAULO Feb 1 (Reuters) - Sales of cars and light trucks in Brazil plunged 36.3 percent in January after a month of record sales for the automobile industry in December, a source familiar with the figures told Reuters on Tuesday.

Sales in January were 230,285 units, down from 361,230 units in December, said the source, who declined to be cited by name because the numbers are still private. January is traditionally a weak month for sales of cars, as customers slow purchases of durable goods.

Yet vehicle sales grew 14 percent from the same month a year earlier, underscoring a still-strong market for car assemblers in Latin America's biggest economy.

Brazil, a country of 190 million where the number of middle class citizens has grown a sizzling 25 percent in the past decade, is a key market for the world's biggest automakers. In the past two years the government awarded tax breaks to invigorate automobile sales amid the global economic recession.

Germany's Volkswagen (VOWG.DE) was the best-selling car brand in January, selling 54,558 cars and light trucks, a growth of 39.6 percent from a year earlier, the source said.

Italian rival Fiat (FIA.MI), which traditionally is Brazil's No. 1 car brand, sold 46,733 units in the month, an increase of 3.4 percent from January 2010.

General Motors (GM.N) remained in the third position. The American automaker sold 41,168 units, 6.7 percent less than a year before. Ford (F.N) sold 22,955 units, an increase of 2 percent in the same period.

(Reporting by Alberto Alerigi Jr.; Writing by Cesar Bianconi; Editing by Guillermo Parra-Bernal and Phil Berlowitz)