(Bloomberg) -- Mercedes-Benz outsold luxury-auto competitors in the U.S. in September, adding to its lead for the year as demand for its sport utility vehicles helped overcome a surge in incentive spending by BMW.

The Daimler AG unit reported deliveries of 29,500 vehicles last month, up 1.7 percent from a year earlier. Toyota Motor Corp.’s Lexus said sales rose 2 percent to 25,801 and BMW AG’s namesake brand posted a 4.6 percent decline to 25,389.

BMW, the holder of the annual luxury-sales crown for the past two years, increased incentive spending 44 percent from a year earlier to an average $6,732 a vehicle while Daimler’s was down 9.3 percent to $4,342. TrueCar analyst Eric Lyman estimated. Toyota’s average, including Lexus, was down 0.1 percent to $2,330. TrueCar, a provider of vehicle pricing information, didn’t break out the figures by brand.

“We’ve seen BMW be really aggressive with its sales strategies,” Lyman said.

SUV Demand

Luxury buyers are being drawn to the improving fuel economy, flexible interiors and all-weather driving of SUVs just like their less-less affluent counterparts, said Michelle Krebs, a senior analyst at AutoTrader. Mercedes’s September results included a more than doubling of sales of its GLC sport utility vehicles.

“Aging millennials are finally forming households and having kids,” Krebs said. “They’ve been fueling the market for compact and now mid-size SUVs, and we know they aspire to luxury.”

Through three quarters of this year, Mercedes deliveries totaled 249,204, with Lexus at 236,193 and the BMW brand at 230,133. The sales figures don’t include BMW’s Mini models or Daimler’s work trucks and Smart cars, which aren’t luxury vehicles.

Continental’s Debut

Ford Motor Co.’s Lincoln began selling its revived Continental sedan last month, reporting 775 deliveries. Lincoln’s total sales rose 1.3 percent to 8,797.

Mark LaNeve, Ford’s vice president of U.S. marketing, said he started his career at General Motors in 1981 selling the massive sedans for which Cadillac then was widely known.

“That market is entirely gone,” he said. “And to some extent it has been replaced by luxury crossovers and SUVs. To another extent, it’s been replaced by full-size SUVs.”

As a result, Lincoln has had to adjust its hopes for the Continental. “It’s still a very important segment, albeit just at much smaller volumes than it was 10, 20 or certainly 30 years ago,” LaNeve said.

--With assistance from Keith Naughton To contact the reporter on this story: John Lippert in Chicago at To contact the editors responsible for this story: Kevin Miller at, John Lear, Mark Schoifet

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