Mercedes with new fuel-efficient 3-series sedan fought by BMW

DETROIT -- Concerning the U.S. luxury car market last year when BMW won the race, the world's largest premium automaker is keeping a sharp eye on its rear-view mirror.

Facing increased competition from Daimler AG's Mercedes-Benz, General Motors Co.'s Cadillac and Volkswagen AG's Audi, BMW is determined to hold on to its hard-won top position with the arrival of the new entry-level 3-Series sedan in U.S. showrooms this weekend.

The success of the 3-Series, first introduced in 1975, has been a key to BMW's ability to outsell Mercedes last year and capture the U.S. luxury crown from Toyota Motor Corp.'s Lexus. That may change as a slew of competing entry-level luxury sedans increases the pressure on the new 3- Series, which features more power yet greater gas mileage than earlier versions.

"Ever since we came out with the 3-Series we were very successful, so we've been hunted for a long time," said Ludwig Willisch, CEO of BMW North America. "We are used to that."

The new 3-Series is making its debut as Mercedes is moving to surpass BMW. Mercedes was the top-selling U.S. luxury brand last month, its sales surging 24 percent to 20,306 while BMW rose 3.1 percent to 16,405. Lexus, which held the luxury title for 11 years until 2011, is targeting U.S. sales to surge more than 25 percent this year to 250,000.

Mercedes started selling an updated C-Class sedan in September that ended the year up 11 percent, edging out the 3- Series sedan by about 500 sales. Audi plans an updated A4 to arrive in U.S. showrooms around midyear. GM's Cadillac will introduce its first compact luxury car in about 25 years when the ATS arrives in the third quarter.Automobile News