LUXURY: Mercedes jumps to early lead in 2019 race

Mercedes-Benz lurched out of the gate hoping to wear the luxury sales crown for the fourth straight year.

The German luxury brand sold 22,507 vehicles in January, excluding commercial vans. Several factors, including "extreme weather in key markets," contributed to a 11 percent year-over-year decline.

Even so, Mercedes started the year ahead of German rival BMW, which finished No. 2 in the luxury sales derby in 2018 behind Mercedes. BMW's U.S. sales in January dipped 4.8 percent to 18,102.

The dark horse in 2019, however, might be California upstart Tesla, which dominated the public's attention in 2018 with the new Model 3 sedan.

In January, Tesla's U.S. sales nearly reached an estimated 32,000 electric vehicles, compared with a mere 7,700 units a year ago, according to projections by the Automotive News Data Center. Tesla does not report monthly sales figures.

Cox Automotive forecasts Tesla's U.S. sales will likely average 25,000 units each month or better through 2019. InsideEVs, a website that tracks Tesla sales, estimated the company's sales to be much lower — only about 8,300 units.

The Model 3, launched in 2017, accounted for the majority of Tesla's January deliveries.

It remains to be seen whether Tesla can continue its frenetic sales pace after the federal tax credit available to buyers was cut in half on Jan. 1. Tesla has cut prices to partially compensate. Its average transaction price fell 7.5 percent in the past year, according to Kelley Blue Book.

Tesla's turbocharged monthly sales growth could be related to order fulfillment, rather than reflective of current demand. The automaker is likely still fulfilling the several hundred thousand Model 3 orders it accumulated over the past few years.

"This question becomes important as the additional Tesla volume alone will lift the SAAR by 0.2 or 0.3 points in January and each month this year," Cox noted.

The big elephant in the luxury room is Tesla, said Akshay Anand, executive analyst at Kelley Blue Book.

"One of the underrated stories of luxury has been the emergence of once niche brands steadily evolving into mainstream threats," Anand said. "2019 will be a make or break year for Tesla, but early returns and financial reports lend themselves to cautious optimism."

Overall, U.S. luxury sales rose an estimated 16 percent in January.

Lexus sales fell 2.8 percent to 17,420. Audi's deliveries slipped 1.8 percent to 14,253 units.

Despite the slow start, Mercedes-Benz USA chief Dietmar Exler is optimistic.

"We anticipate a strong rebound with the arrival of several new models this year including the all new A-Class sedan and GLE," Exler said in a statement.

BMW's January sales slide brought an end to a 14-month streak of gains. Top performers for the month included the X3 and X5 crossovers and the 5-series sedan. Crossovers accounted for 40 percent of January sales.

A wave of new and updated products this year has BMW execs bullish on 2019, despite anticipated industry headwinds, such as rising interest rates. In February, the seventh-generation BMW 3 series will begin arriving in showrooms followed by the new X7 crossover, 8-series convertible and Z4 roadster.

"We have the best product lineup we've ever had; we have the youngest product line," BMW of North America CEO Bernhard Kuhnt told Automotive News at the NADA show in January.

When asked if he thought BMW would snatch the luxury sales crown in 2019, Kuhnt responded emphatically: "We don't participate in the sales race. You can put a big exclamation mark on it."

Even so, he left the door ajar. "If we ... become No. 1, you know what, I am going to celebrate," Kuhnt said. "But, we don't have t-shirts printed: 'We want to be No. 1.'"

While the top five luxury brands reported sales declines, No. 6 Acura moved in the opposite direction, rising 9.6 percent to 9,764 sales.

No. 8 Lincoln surged 20 percent, the luxury segment's largest gain outside Tesla, to 7,715 units.

Porsche Cars North America reported January U.S. sales of 5,419 vehicles, up 13 percent from the same time last year. Sales were fueled by strong demand for the new-generation Cayenne. Deliveries of all Cayenne model variants combined rose 65 percent to 2,150 vehicles, making it the brand's top selling model in January.