Mercedes squeezes past Audi for No. 2

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The luxury sales race is tightening as Audi, BMW, and Mercedes are duking it out for top honors.

So far, it's been a bloody campaign. Audi and BMW have been in a constant war of words (with billboards, commercials and dealership shenanigans) but in terms of sales, the Bavarian is king. For the first half of the year, BMW managed to sell 585,755 vehicles while Audi moved 554,950 units.

Watching quietly in the background, Mercedes had an ace in the hole - the new E-Class. Strong demand caused June sales to surge to a record setting 113,300 units, which pushed their yearly sales total to 556,700. This means the tri-star brand outsold their four-ringed competitor by 1,750 units - a slim margin, but one they'll gladly take.

More interestingly, despite the economic downturn, all three brands posted increased year-to-year sales (over 2009): Audi climbed 19.1%, Mercedes soared 15.2%, and BMW gained 14.1%. Audi's stellar performance was prompted, in part, by strong demand in China which has overtaken Germany as the brand's most important market.