Bayerische Motoren Werke AG (BMW)’s BMW brand, helped by a redesigned 3 Series sedan and a March sales increase of 18 percent, finished the first quarter with 36 more deliveries than Daimler AG (DAI)’s Mercedes-Benz in the U.S.

Sales gains by both BMW and Mercedes last month indicate that the battle to be the top-selling luxury brand in the U.S. will continue through 2012 as inventories and new products arrive in dealerships. BMW took the top spot last year with a lead of just 2,715 units over its German rival.

“We’re going to be neck-in-neck,” Steve Cannon, chief executive officer of Mercedes’s U.S. operations, said yesterday in an interview.

U.S. sales of the BMW brand rose to 23,940 last month while Stuttgart, Germany-based Daimler’s Mercedes-Benz increased 7.7 percent to 23,134, according to statements yesterday by the companies. Toyota Motor Corp. (7203)’s Lexus brand fell 2.6 percent to 20,140.

After three months, Munich-based BMW retook the sales lead over Mercedes, which had held a 770 unit advantage after February. BMW sales rose 17 percent to 61,549 in the first quarter. During the same period, Mercedes deliveries advanced 15 percent to 61,513 while Lexus increased 3.7 percent to 49,096.

BMW became the top-selling U.S. luxury auto brand last year after Lexus had held the spot for the previous 11 years.

The results exclude Daimler’s Sprinter vans and Smart cars and BMW’s Mini brand, which aren’t luxury vehicles.

Mercedes will beat its 2007 results of 253,000 sales, the best year on record in the U.S., Cannon said. Mercedes sold 245,192 vehicles last year in the country.

BMW Growth

While BMW hasn’t given a growth target for 2012, Ludwig Willisch, head of BMW’s U.S. operations, said in February that he expects sales to increase more than 10 percent and for the new 3 Series to help keep BMW No. 1 in the U.S.

“The year is still young and BMW alone will introduce in 2012 more new and refreshed models in the U.S. than it ever has before in any one year making us strongly optimistic about the months ahead,” Willisch said yesterday in a statement.

BMW, which began selling a redesigned version of the 3 Series in February, saw sales of the sedan rise 16 percent in March, the company said in a statement.

Mercedes sales have been helped by a new M-Class SUV and updated C-Class sedan and new coupe version. Deliveries of the M-Class rose 46 percent last month and the C-Class, while down in March, increased 19 percent in the quarter, the automaker said in a statement.

C-Class Overhaul

“We’re putting up essentially a redesigned C-Class against the brand new 3 Series,” Mercedes’s Cannon said. “It’s new product against new product.”

Mercedes has better inventory levels than BMW, which just released its new model, he said.

“We’ll enjoy that advantage for as long as it lasts — it won’t last very long because they’re going to get more units out there in inventory but for the moment we’re very optimistic,” Cannon said.

Mercedes plans to bring an updated version of the GLK SUV to showrooms later this year.

The two companies’ gains in the first quarter, which typically are the worst for luxury sales, suggest the rest of the year will be strong, said Jesse Toprak, an industry analyst with, a website that tracks auto sales.

“You’re going to see them outpace industry growth for the rest of the year nearly every month,” he said.

Audi Sales

BMW and Mercedes aren’t just competing for the luxury market in the U.S. They’re wrestling for global supremacy as well. Daimler has fallen to third behind Volkswagen AG (VOW)’s Audi globally.

U.S. deliveries of Audi, the premium brand of Wolfsburg, Germany-based VW, rose 18 percent to 11,585 vehicles last month in the U.S., the company said in a statement. First quarter sales advanced 16 percent to 29,470.

Audi finished last year in sixth place behind Cadillac and Acura, which sold 34,828 and 5,738 more vehicles respectively than the German brand.

Cadillac’s lead over Audi narrowed to 1,496 units last quarter as the U.S. brand has suffered from increased competition by the German monikers and from an aging lineup that will be updated later this year with the newt XTS and ATS sedans.

Cadillac sales fell 13 percent to 10,537 last month, finishing the quarter down 24 percent to 30,966.

“The competition is being very aggressive,” Kurt McNeil, GM’s Cadillac vice president of sales, said yesterday in a conference call. “It’s not for the faint of heart.”

Acura, Porsche

Cadillac’s lead over Acura narrowed as well, to 161 more deliveries in the first quarter.

Honda Motor Co. (7267), based in Tokyo, said in a statement that sales for its Acura brand fell 11 percent to 11,166 last month and finished the first quarter down 1.8 percent to 30,805.

Porsche AG (PAH3), the Stuttgart-based automaker, sold 2,460 vehicles in the U.S., a 4.9 percent decrease, the company said in a statement.

Nissan Motor Co. (7201)’s Infiniti sold 10,185 vehicles, a 9.8 percent decline from a year earlier, the Yokohama, Japan-based company, said in a statement.

Ford Motor Co. (F) sold 8,803 Lincolns in March, a 3.6 percent gain from a year earlier, according to a statement from the Dearborn, Michigan-based automaker.

Land Rover deliveries rose 22 percent to 4,199, while Jaguar sales were up 51 percent to 1,321, the brands, owned by Mumbai-based Tata Motors Ltd (TTMT), said in an e-mail.