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Boosted by strong sales in China, the luxury automobile sector is recovering faster than expected in 2010. Makers such as Audi AG, Mercedes-Benz, and BMW AG have raised their quarterly and full-year earnings guidance.

Boosted by strong demand in China, Brazil, and India, BMW AG, Audi AG, and Mercedes-Benz reported an increase in sales for the month of October. BMW's sales in China rose 81% to 9,558 vehicles, and increased 56% to 343 in India, while sales in Brazil more than doubled to 838 vehicles. Audi's global sales inched up 0.4% to 82,750 cars. Audi expects to meet its full-year sales target of 130,000 units in China. Mercedes-Benz's global sales rose 7.2% to 88,400 vehicles, while sales in China increased 78% to 6,600 units.

Daimler AG's chief executive, Dieter Zetsche, says that Daimler's core unit -Mercedes-Benz- is confident it will post an operating profit in its second half. Mr. Zetsche also discusses Mercedes's production and sales by market. Sales at the unit dropped 17% in the eight months ended in August to 711,300 vehicles.

The downturn in the global economy has affected the earnings of luxury car makers BMW AG, Daimler-Benz AG, and Audi AG, but they are better positioned to weather the financial crisis because of high cash reserves and low debt. Article discusses the companies' recently-reported earnings and sales, liquidity, incentives to buyers, new-product development, and prospects of recovery.

Despite declining overall sales, automotive manufacturers BMW AG and Mercedes-Benz posted strong compact car sales in August. Mercedes-Benz's total sales dropped 12% to 84,400 units, but sales for the company's Smart minicar brand grew 29% to 9,200 units. BMW's total sales rose 2% to 101,673 vehicles, but sales for its Mini brand rose 11% to 16,257 units. Rival automotive company Audi AG posted a global sales growth of 2% to 67,700 units in August.

Consumer preferences for smaller fuel-efficient automobiles are reflected in luxury car manufacturer BMW AG's unit sales in July. BMW reported a 40% sales increase for its compact series while sales were down 12% for larger car series. Overall sales rose 2% in July. Meanwhile, Mercedes-Benz reported a 27% car sales increase in July for its compact line, while sales of larger vehicles dropped 19%. Overall July sales for Mercedes-Benz dropped 1.4%.