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Mercedes sees record U.S. sales, won't win luxury race

By Deepa Seetharaman

DETROIT (Reuters) - Mercedes-Benz expects to lose its lead in the U.S. luxury market to German rival BMW , which is expected to be aggressive in its incentive strategy this month.

The automakers have been in a tight race for the top spot in the competitive U.S. luxury market, with Mercedes slightly ahead of BMW by about 2,000 vehicles through November.

But a top Mercedes executive said on Thursday that the luxury nameplate will likely fall back, even as it posts record U.S. sales of more than 270,000 for the year.

"I don't think we're going to win the sales race this year," Steve Cannon, the head of Mercedes-Benz USA, told reporters during a luncheon in Detroit.

Cannon, who was promoted to his position a year ago, said that there was no pressure from top executives in Germany to reach the No. 1 spot. Mercedes' expanded and refreshed lineup drove U.S. sales to their highest level yet, he said.

Both automakers are expected to use incentives and special financing offers to drum up sales during the holiday season. But BMW, in particular, "pulls some very large numbers" in December, Mercedes spokeswoman Donna Boland said.

In December, BMW tends to "slather on incentives like butter on toast," IHS Automotive analyst Rebecca Linland said, adding that BMW also markets its deals more aggressively than Mercedes.

BMW was the best-selling luxury brand in the United States last year, ending the 11-year reign of Toyota Motor Corp's <7203.T> Lexus brand, which was hurt by vehicle shortages after the earthquake in Japan in March 2011.

Through November of this year, Mercedes has sold about 246,000 vehicles, slightly ahead of BMW, which has sold about 244,000 vehicles.

(Reporting By Deepa Seetharaman; Editing by Nick Zieminski and Steve Orlofsky)

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