Mercedes-Benz expects to be dethroned by BMW in U.S. luxury market, despite posting record sales this year.

Throughout the entire year it was a pretty close race between the two German brands, with Mercedes-Benz keeping a fragile lead at the end of November with about 2,000 more cars delivered.

An executive at M-B said yesterday the luxury brand could fall to second place, even though this year they had record sales of more than 270,000 units. Steve Cannon added that German executives are not pressuring the U.S. division to remain in first place.

Both companies are expected to use important incentives and special financing offers during the holiday season to increase sales. Mercedes-Benz spokeswoman Donna Boland said that BMW, in particular, "pulls some very large numbers" at the end of the year. IHS Automotive analyst Rebecca Linland declared that BMW has the tendency to "slather on incentives like butter on toast."

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