* German car market actually down 3.6 pct adj -economist
* Hyundai more popular than most import brands
* Every fourth car sold sports a VW logo on grille
FRANKFURT, FEB 2 - South Korean automaker Hyundai and its affiliate Kia in January posted huge gains in the stagnant German car market, Europe's largest, official data showed on Thursday.
Luxury brands Audi and Mercedes-Benz, whose individual market shares dwarf most volume brands in Germany, also enjoyed healthy gains as BMW suffered ahead of this month's relaunch of its best-selling 3 Series.
Data from Germany's motor vehicle authority KBA revealed a poor performance for many other brands including Renault , GM's Opel, Nissan, Peugeot and Toyota, which all saw new registrations fall between 8 and 17 percent.
Even the Volkswagen marque saw demand slip 2.3 percent in January, more than the 0.4 percent drop recorded for the overall market. Nonetheless, almost one in four newly registered vehicles in Germany sported a VW logo on the grille.
Korean brands Hyundai and Kia, which have invested heavily in their styling and design, combined for a 2.4 percentage point gain in share over last January.
Hyundai's new vehicle registrations jumped by half, while Kia's more than doubled last month, giving them a combined 5.5 percent of the market.
The larger of the two, Hyundai, with 3.6 percent of the market, was more popular in January than rival brands Nissan, Fiat, Peugeot, Toyota and even Citroen, which came the closest at 2.9 percent.
Excluding Ford, the only import brand that surpassed Hyundai was Renault, though KBA did not provide figures that adjusted for the inclusion of the Renault group's Dacia brand, which is targeted at the lower end of the market.
Economists at Barclays Capital calculated Germany's car market declined by 3.6 percent when adjusted for seasonal and working-day effects, putting its annual rate of 3.15 million about 6 percent off the long-term average.
"We see scope for the German car market to remain in positive territory, but admittedly this will depend on the speed at which the euro area sovereign debt crisis is resolved," Barclays wrote in a research note.
Domestic vehicle production, a key barometer of economic output and a future driver of employment, increased 12 percent to 445,000 cars, according to figures from the German auto industry lobby VDA.