Mercedes-Benz, the world’s third-largest maker of luxury cars, sold more vehicles in a single month than ever before as demand surged for its new compact cars and the top-of-the-line S-Class.

Deliveries rose 13 percent in March to 158,523 cars and sport-utility vehicles, contributing to the best first quarter in the brand’s history, the division of Stuttgart, Germany-based Daimler AG said on Friday in a statement. The stock rose to the highest in more than six years.

Sales growth at Mercedes has exceeded 10 percent for nine consecutive months as expanded lineups of compacts and the up-market E-Class won buyers. The carmaker and larger premium-segment competitors Bayerische Motoren Werke AG and Audi AG are posting gains as the European auto market recovers from a six-year slump, with industry-wide U.K. deliveries in March at the highest for the month in a decade.

“Mercedes is growing at a brisk speed at the moment,” Frank Biller, a Stuttgart-based analyst at LBBW, said by phone. “This is a good basis to catch up with the competition. But I don’t expect BMW or Audi to post bad numbers for March either.”

Ranking struggle

The release of 30 new models through 2020 is part of Daimler chief executive officer Dieter Zetsche’s push for Mercedes to retake the lead in global premium-auto sales by then from Munich-based BMW and Ingolstadt, Germany-based Audi. Mercedes lost the top spot in luxury-car sales in 2005 to BMW, which is also introducing vehicles to fend off its two smaller challengers and is targeting 2 million deliveries for the first time this year.

Daimler has added production shifts, including a plan for more work hours starting in May at a Mercedes factory in Kecskemet, Hungary, to keep pace with sales growth. The company held a groundbreaking ceremony today for a 300 million euro ($411 million) expansion of its plant in Sebes, Romania, to make a new nine-speed automatic transmission starting in 2016.

Zetsche said in February that the gains in demand will enable Mercedes to scale back sales incentives and raise some prices. Daimler is forecasting that operating profit from ongoing operations this year will greatly exceed the 7.9 billion euros reported in 2013.

Profitable tailwinds

“The tailwinds from the new models should contribute to a relatively profitable next two years,” Frank Schwope, an analyst at Norddeutsche Landesbank in Hanover, Germany, said today in a research report.

Mercedes’ sales in Europe rose 7.6 percent last month, pushed by a 20 percent increase in the U.K. that outpaced the country’s auto-market gain of 18 percent. Industry-wide U.K. car sales in March at 464,824 deliveries were the most for the month since a record set in March 2004, the country’s SMMT manufacturers’ association said.

Demand at Mercedes in the U.S. increased 11 percent in March to 27,401 vehicles.

Mercedes’ Chinese deliveries surged 48 percent in the first three months of 2014, helped by the extended-wheelbase version of the E-Class. 

(Bloomberg)