BMW sold over half a million cars in the first five months of this year after group sales rose 7.5 per cent to 113,626 in May, the world's largest luxury carmaker said yesterday.

Sales of its core BMW brand rose 6.4 per cent to 96,061 units last month, while Mini sales rose 14.2 per cent to 17,511 cars. BMW also delivered 54 Rolls-Royce Phantoms, down 15.6 per cent versus May 2004.

For the first five months, group car sales increased 8.4 per cent to 517,184 units, led by solid demand for new BMW models such as the X3 mid-size offroader and the 1-Series hatchback. Powered by its biggest-ever model offensive, BMW's sales have overtaken those of archrival Mercedes Car Group.

The recent launch of its revamped 3-Series saloon means the BMW brand may finally overtake Mercedes-Benz as the world's best-selling luxury marque this year.

Since its launch at the beginning of March, BMW has sold 40,834 of the key mid-sized saloon.

Sales at DaimlerChrysler's Mercedes Car Group fell 5.8 per cent in May to 96,400 units, hurt by a weak showing in Germany and model changeovers at its Mercedes-Benz brand.

The German-American carmaker said that sales of Mercedes-Benz cars retreated 6.6 per cent to 83,600 vehicles, while deliveries of Smart minicars dipped 0.4 per cent to 12,800.

The division's sales fell a cumulative 3.4 per cent in the first five months to 462,900 vehicles.

Rival Audi, the premium brand owned by Volkswagen, is enjoying far more success than the venerable Mercedes-Brand marque and is increasingly posing a bigger threat to BMW.

Audi increased global car sales in May by some 14 per cent to over 72,000 units thanks in particular to strong demand for its revamped A6 Avant estate and booming sales in its core German market.

Deliveries through May gained six per cent to a record 342,000 cars and it stuck to its goal of reaching an all-time high in unit sales despite a comparative lack of new models, BMW's Ingolstadt-based competitor said earlier this month.