BMW AG's namesake luxury brand increased U.S. sales 16 percent in July to close the gap among top-selling luxury brands with Toyota Motor Corp.'s Lexus, which was little changed amid recalls, Bloomberg reported.

BMW sales rose to 19,064, the Munich-based automaker said today. Daimler AG's Mercedes-Benz sold 17,367 vehicles, up 7 percent from a year earlier. Lexus reported an increase of less than 1 percent to 18,595.

Revamped models such as BMW's 5 Series sedans and Mercedes's E-Class cars have helped the two brands gain on Lexus. The Toyota division has been hurt by the automaker's record recalls in the past year, including Lexus models such as the LS 460 sedan and GX 460 sport-utility vehicle.

“Right when Lexus is hitting a weak spot, plenty of other cars are able to swoop in and take market share,” said Jessica Caldwell, senior analyst at Edmunds.com, a Santa Monica, Calif.-based provider of industry data. “Talk about a three-horse race -- it's really close.”

Through last month, Lexus sold 126,025 cars and light trucks, compared with 121,041 for Mercedes and 119,696 for the BMW brand.

BMW gained on Lexus for the second straight month, as it moves toward its goal of passing Lexus for top rank in U.S. luxury sales by 2012. Lexus has led since 2000, Caldwell said.

BMW sold 9.6 percent more 5 Series sedans and 51 percent more X5 SUVs in July than a year earlier.

Mercedes C-Class sales surged 19 percent for the month.

Lexus was hurt by a 9.4 percent slide in demand for its cars, while deliveries of its SUVs rose 12 percent.