Lexus sold 27,560 cars and sport-utility vehicles in December in the US and 229,329 for 2010, the Japan-based automaker said in a statement.
The brand's sales fell 3.5 per cent in December from a year earlier while rising 6.2 per cent for all of 2010. The Lexus annual lead over BMW shrank to 9,216, less than half the 19,473 gap in 2009. Mercedes' US sales increased 14 per cent last year, leaving the Stuttgart, Germany automaker's brand in third.
"It was a bit of a roller coaster" for Lexus last year, said Jesse Toprak, an analyst at TrueCar.com, a website that tracks auto sales. "They certainly got impacted negatively by the lingering recall news for Toyota, and we've also seen BMW and Benz being more aggressive when it came to incentive spending and marketing."
Among other luxury brands, General Motors' Cadillac boosted deliveries 35 per cent for the year, while the Audi brand of Germany's Volkswagen sold more than 100,000 vehicles in the US for the first time.
"The availability of credit and the availability of leasing mechanisms have certainly helped the entire industry," Kurt McNeil, Detroit-based GM's vice president of sales for Cadillac, said in an interview.
Demand for large luxury sedans rebounded in 2010, Johan de Nysschen, president of Audi of America, said in a telephone interview.
"We knew that during 2009, when that segment contracted so sharply, that the people who buy those cars still had the money to do so," de Nysschen said. "It was just not seen as the right thing to do in the social dynamic that was experiencing harsh economic times."
BMW's US sales rose 16 per cent to 23,280 for Dec-ember and 12 per cent to 220,113 for the year, according to a statement from the Munich-based automaker. Mercedes reported US sales of 20,090 last month, up 0.3 per cent, and 216,448 for the year. The results exclude Daimler's Sprinter vans and Smart cars and BMW's Mini brand, which aren't luxury vehicles.
Mercedes had moved within about 2,700 sales of Lexus after the third quarter, a period in which it outsold BMW.
Mercedes had "very aggressive lease deals," including about $300 (Dh1,101) a month for a C-Class sedan, Toprak said. "It basically brought in all of these consumers who otherwise didn't even think about leasing a Benz," he said.
Lexus more than doubled incentive spending in the fourth quarter from a year earlier, while Mercedes reduced such expenses 6.4 per cent and BMW's fell 37 per cent, according to Santa Monica, California-based TrueCar.
Lexus' incentive increase last month was at a rate comparable to previous years in December, when it holds its main clearance sale, Mark Templin, Toyota's US group vice-president for the brand, said on a conference call. "It was never our goal to be No. 1, but we're proud to be there," he said.
BMW's fourth-quarter sales benefited from the arrival of the all-wheel-drive 5 Series sedan, Jim O'Donnell, head of the automaker's US unit, said in a telephone interview.
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