In the annual sales horserace, BMW beat out Mercedes-Benz with the top 2011 U.S. sales numbers in the luxury auto market--with both German automakers ousting Lexus from the number one slot it had held for 11 straight years.

BMW boosted its units sold 13% from the previous year to reach 247,907 vehicles in 2011; Mercedes-Benz, which also bumped up its sales 13%, sold over 2,000 fewer vehicles than BMW at 245,231. Many experts attribute BMW's triumph to the $200 incentive it offered customers during December to edge out its Stuttgart-based competitor.

The luxury car market has had no shortage of challenges, shrinking from 17 million in pre-recession 2007 to some 12 million in 2011.

But these robust sales figures were made possible in part as Lexus sales floundered in the wake of the earthquake and tsunami in Japan last March. Lexus dropped its sales 13% from the previous year to place third in sales with 198,552 vehicles. The German automotive brands were able to capitalize on Lexus's post-natural disaster manufacturing doldrums and the generally stodgy repertoire it currently has on tap.

"Lexus needs to ramp up their production in Japan and and freshen their lineup," said Michael Omotoso, senior manager of global powertrain forecasting at LMC Automotive. "The GS was just redesigned and the LFA is tiny volume, but the rest of their lineup is pretty old."

That may not wash with true tire-heads.

"Lexus has had some issues around design, in that it's not particularly interesting," said Michelle Krebs, senior analyst at Edmunds.com. "It has a reputation as being removed from the road, a ride handling aspect unpopular with people who are real enthusiasts."

Since Lexus entered the competitive luxury brand segment in 1989, it has forced Mercedes and BMW to raise their game. But despite vows from Toyota President Akio Toyoda, who has a racing background, to provide more pizzazz and performance to his models, that initiative has remained unrealized as of yet.

It's hard for the ever-popular Lexus RX to sustain the brand, especially with the Germans focusing on America.

"BMW and Mercedes have been pushing here hard in the U.S.," Krebs said. She cited BMW plants in Spartenburg, S.C. and the Mercedes hub in Tuscaloosa, Alabama (where the revised C-Class will be manufactured starting in 2013) as indicative of the brands' commitment to the American market.

Mercedes-Benz U.S.A. president and CEO Steve Cannon attributed the promising sales numbers to the five new product launches the brand had this year, with sales for the new M-Class up 21% year-over-year and the C-Class up 18% (with a record close to 8,000 C-classes sold in December). Mercedes will continue its momentum with the new SL come April and the GL in the fall.

"Rankings don't matter," Cannon told AOL Autos. "The brand is really on a roll here in the United States. Whether we finish 2,000 units ahead or behind of BMW is irrelevant. We don't think the luxury crown is a consumer-relevent game. Maybe for bragging rights, but what does that do?"

But if Mercedes-Benz does want to top BMW next year, the brand will have to compete with the 14 new models the Munich automaker intends to launch--including the new M5, the 6 Series Grand Coupe, the BMW ActiveE.

The bread and butter of the BMW brand will remain the same.

"BMW Group sales momentum has been increasing all year and this new burst of consumer confidence filled our dealer showrooms," said Ludwig Willisch, President and CEO of BMW of North America. "I have great confidence that 2012 will be even better especially with the all-new BMW 3 Series arriving in the U.S. in February."

Beyond the Top Three

GM's Buick nabbed the fourth spot for U.S. luxury-brand auto sales with growth of 13% to 177,633, and GM's Cadillac grew just 3% to place fifth in sales at 152,389.

Last March's earthquake-tsunami one-two punch proved more inauspicious for other Japanese luxury brands. Honda's Acura felt the brunt of the natural disaster by dropping 8% to 123,299, and Nissan's Infiniti dropped 5% to 98,461 to fall below Volkswagen AG's Audi, which nabbed 117,561, a 16% increase.

Lincoln, next in line with 85,643, saw sales figures remain even--a reason that Ford has put an extra push on its luxury brand by building a boutique ad agency out of New York called Team Lincoln to couple its already existent Team Detroit. The new agency will focus on marketing the sleek MKS, MKX, and MKT, and next week at the Detroit Auto Show Lincoln is expected to unveil a new version of its MKZ.

Volvo, now under China's Geely Automobile Holdings Ltd., boosted its U.S. sales a hefty 25% with 67,240 vehicles. With Scandinavian competitor Saab out of the picture given its recent Chapter 11 filing, Volvo could be seen to gain increasing market share.