MERCEDES-BENZ sales rose 23 percent in China in the first five months, buoyed by upgraded models, the company said yesterday.

The world's leading luxury car maker said it sold 11,200 units from January to May, accounting for 72 percent to its total in northeast Asia.

Excluding Hong Kong and Macau, growth on the Chinese mainland raced along at 34 percent to 9,847 units during the period, powered by the S-Class. The high-end model sold 4,270 units, a 44 percent increase.

"By introducing more cutting-edge technology with the latest innovations to our flagship S-Class, we have enhanced our leading position in the premium car segment," said Klaus Maier, president and chief executive officer of Mercedes-Benz (China) Ltd.

"With further promotional efforts, we will strive to maintain strong sales in China throughout the rest of 2007."

China's expanding economy helped to increase personal incomes and power market demand for luxury cars.

Among its domestic efforts, Mercedes-Benz Corp is making E-class sedans in a venture with Beijing Automotive Works Co Ltd, turning out 25,000 units a year.

The company is banking on localization to make its luxury models more affordable for Chinese customers and gain a price advantage against rivals BMW and Audi.

The car maker began offering a revamped E-class sedan in May to entice China's first-time buyers after the model was accepted by government procurement offices at the beginning of this year.

The company also expanded its portfolio by introducing imported Mercedes-AMG and other sport utility vehicles to meet local demand.

China's luxury car market has grown 30 percent year on year, dominated by Volkswagen AG's Audi unit and BMW.