BMW, owner of Mini and Rolls-Royce, outsold the Mercedes Car Group, which includes the Smart and Maybach marques, by 6,183 cars in the first half.
The BMW brand also outsold Mercedes-Benz badged cars in May and June, although the Mercedes brand stayed ahead in the six-month period.
BMW's success in snatching the sales lead reflects an aggressive programme of new model development that has seen the Munich company fill in gaps in its model line-up, including the recent X3 small offroader and 6-Series coupé.
It comes as Mercedes, part of DaimlerChrysler, tries to persuade unions to accept wage cuts in order to reach BMW's higher level of profitability.
Daimler is also searching for a new head for Mercedes after workers' representatives forced the ejection of Wolfgang Bernhard, an efficiency specialist from Chrysler, shortly before he was due to start the job.
In the six months to June, BMW group sales rose 8.5% to 590,983 cars, while Mercedes group saw a decline of 3.3% to 584,800.
BMW said profits were more important to it than its sales ranking.
Michael Ganal, director of sales and marketing at BMW, forecast "significant" growth for the rest of the year.
"With the 1 Series we will make a powerful entry into the compact class as of September with a clearly profiled premium offer," says Ganal.