BMW hits 2017 sales record but Mercedes keeps lead

BERLIN (Reuters) - BMW reported record sales last year on strong demand for its sport-utility vehicles and the overhauled 1-Series compact but was outsold by Mercedes-Benz, keeping the order in the three-way German luxury sales race unchanged.

Sales of BMW brand models rose 4.2 percent in 2017 to 2.09 million passenger cars and SUVs, the Munich-based carmaker said on Friday, compared with a 9.9 percent gain to 2.29 million at Mercedes, which claimed the top spot in global luxury-car sales rankings for a second year.

Registrations at Volkswagen's Audi premium division edged up 0.6 percent to a record 1.88 million cars, it said on Friday, benefiting from a 34-percent December surge in China, the brand's largest market.

BMW, which had kept the global luxury sales crown for about a decade before slipping behind Mercedes in 2016, said deliveries were fuelled by a 9.6 percent gain for its SUV lineup and a 15 percent increase for the 1-Series.

"I'm confident BMW sales will continue to grow during 2018, while we also maintain our focus on profitability," said new sales chief Pieter Nota, who replaced Ian Robertson on Jan. 1.

BMW posted a 9.5 percent gain in December registrations to 195,916 vehicles, narrowly beating Mercedes and Audi whose sales came in at 193,534 and 180,250 cars respectively.

(Reporting by Andreas Cremer; Editing by Maria Sheahan and Edmund Blair)