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If BMW and Lexus sales continue at their current paces, the Bavarian automaker could topple its Japanese rival and become the best-selling luxury brand in the U.S.

According to Automotive News, BMW and Lexus sales are neck and neck, with BMW selling about 3600 more vehicles than Lexus through the month of May. So far this year, Lexus's sales have collapsed by 37.2 percent compared to the same time period last year, while BMW's sales have declined 30.5 percent. BMW's market share now matches Lexus's at 1.9 percent.

"This year's emphasis is on maintaining our market share and even growing our share," said Jan Ehlen, spokesman for BMW North America. "If this results in remaining in the top spot of the premium market, that would be a nice bonus."

According to Automotive News, BMW has been in the second place spot for eight years straight. Before Lexus achieved its stranglehold on top, it was traditionally held by American automakers; Cadillac dominated from 1946 through 1997, and Lincoln nabbed it in 1998. But so far this year, European luxury makers--including Audi, Porsche, Jaguar, Land Rover, Mercedes-Benz and BMW--have pushed their collective market share up by almost a full percentage compared to last year.

The U.S. has become BMW's biggest market, with 23 percent of its 1.27 millions sales last year coming from the U.S. Germany is its second-biggest market, where it sold 19.6 percent of its vehicles.

John McCandless, a spokesman for Toyota Motor Sales U.S.A., dismissed the title of sales leader as superfluous--though he did mention that sales could be boosted by the introductions of the 2010 Lexus IS C and 2010 Lexus HS250h.

"Volumes can vary," he said. "Meeting the needs of our customers is what's important."

Sales of Bayerische Motoren Werke AG’s BMW and Toyota Motor Corp.’s Lexus, the most popular U.S. luxury brands, fell less in June than the previous month as buyers began returning to showrooms.

U.S. sales totaled 16,744 for the BMW brand, a 20 percent drop from a year earlier, and better than the 28 percent decline in May, Munich-based BMW said. Lexus reported selling 16,874 vehicles, a slide of 17 percent, better than the previous month’s 36 percent fall.

Luxury sellers “are seeing a bottom, they think the worst has past,” said Milton Pedraza, chief executive officer of the Luxury Institute LLC, a New York-based consumer-research firm.

Lexus took the lead from BMW in June after the German automaker sold the most vehicles for three months straight. BMW held onto the top spot this year overall, selling 93,563 vehicles, compared to Lexus’s 90,060, challenging Lexus’s nine- year reign as the top seller of luxury autos in the U.S.

Daimler AG’s Mercedes-Benz brand sold 15,155 vehicles for the month, a 23 percent drop that was better than May’s 31 percent fall, Stuttgart, Germany-based Daimler said. The total including the Smart brand was down 26 percent to 16,271 vehicles, better than May’s 33 percent fall, the company said.

‘Still Underwater’

Nissan Motor Co.’s Infiniti sales for June were down 32 percent to 6,304 units, said U.S. Vice President Al Castignetti. That fall was better than May’s 38 percent fall for the Tokyo- based automaker. Honda Motor Co.’s Acura division fell 34 percent to 8,280 vehicles, compared to a 36 percent drop in the previous month for the Tokyo-based automaker’s luxury unit.

Not all luxury brands did better than May. Dearborn, Michigan-based Ford Motor Co.’s Lincoln luxury brand fell 27 percent to 7,137 vehicles, after reporting a 2.4 percent increase in the previous month. The drop was more than double Ford’s overall 11 percent fall.

Detroit-based General Motors Corp.’s luxury division, Cadillac, fell 41 percent to 8,473 vehicles, compared to a 40 percent drop in May, according to a statement.

Growth for luxury segments of the economy will “continue to be slow for the next 12 to 20 months,” said the Luxury Institute’s Pedraza. “People are feeling better, but many are still underwater as the last 12 months have been horrible.”