Tesla Motors Inc. (NASDAQ: TSLA) may have become the hot luxury car of choice in some nations, and Audi with its all-wheel drive technology may have gained on the global market leaders — Mercedes and BMW. Neither of these kept Mercedes-Benz from setting an all-time record for global sales in March. Parent Daimler announced the brand sold 158,523 vehicles in the month, up 13.3% from March 2013.

Mercedes’ March numbers were part of a trend. Sales in the first quarter rose 15.2% to 374,276. Mercedes sales chief Ola Källenius commented:

We are continuing the success story of the record year 2013 with additional new products and have posted the best-ever first-quarter sales in the company’s history.

The new inexpensive CLA has been a particularly big success. Its sticker price, at $29,900, has made it a near perfect model to attract young drivers. Additionally, Mercedes has continued to upgrade its line of sedans and SUVs.

Mercedes primary rival, BMW, has continued to track it blow by blow, releasing dozens of new and upgraded models. Most months, the two car companies jockey for the global lead. For example, in the United States, Mercedes sold 77,238 cars and light trucks in the first quarter of the year, compared to 72,337 for BMW.

Naturally, in its home market of Germany, Mercedes does well. But the Holy Grail of car sales has moved to China, the world’s largest car market. The company reported:

The growth rates achieved by Mercedes-Benz in March were especially high in the Asian markets: In China (incl. Hong Kong), the company is continuing the sustained growth trend of recent months with sales of 24,937 vehicles (+34.0%).

All global car companies face a new challenge in China, one that could curtail sales for years. Air pollution in the largest cities of the People’s Republic may cause the government to set quotas on the number of cars that can be driven in these metropolitan areas.

Ultimately, Mercedes’ only real competition in the global car market is from BMW and Audi. American brands, led by General Motors Co.’s (NYSE: GM) Cadillac, have no substantial presence outside the United States. This lack of major competitors means Mercedes has a clear road ahead — if global luxury car sales hold. Based on the explosion of wealthy people around the world, that market is not likely to falter at all.

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