NEW YORK (Bloomberg) -- Daimler AG's Mercedes-Benz and BMW AG are spending a combined $280 million to improve their Manhattan showrooms as they race to become the top-selling luxury brand in the United States.
Mercedes is investing $220 million in a new dealership that will feature soaring ceilings and changing light colors when it opens in May. Three blocks away BMW is spending $60 million to free up floor space, renovate its store's facade and make the location more environmentally friendly.
Mercedes is leading BMW by less than a thousand sales this year as they work to overtake Toyota Motor Corp.'s Lexus as the top-selling luxury brand in the United States for the first time in 11 years.
Some of both automakers' best clients are located in Manhattan, said Jesse Toprak, an analyst with TrueCar.com.
"The financial markets are coming back, bonuses are coming back, bankers are doing just fine again," Toprak said. "Some of the best months historically for both brands had been whenever the bankers get their Christmas bonuses."
Mercedes sold 53,346 vehicles in the United States in the first three months of the year, topping BMW's 52,617 deliveries. Lexus sold 47,356 light vehicles.
Lexus kept the title last year, beating BMW by 9,216 sales. Mercedes finished third.
The results exclude Daimler's Sprinter vans and Smart cars and BMW's Mini brand, which aren't luxury vehicles.
Mercedes's new U.S. flagship store replaces its location on 41st Street, according to plans the automaker revealed amid the New York auto show this week.
The new store has five levels, including three underground, and is 330,000 total square feet, which is more than 100,000 square feet larger than the previous location.
The site has a helix ramp that allows customers to pull into the basement to drop off their vehicles for servicing.
"It's not just a dealer facility," Ernst Lieb, head of Mercedes U.S. operations, said at an event to preview the new space. "It's more for us. It's a showpiece."
The new facility has 20 more work bays than the previous site and a glass-enclosed service area that allows customers to watch technicians work.
The previous dealership serviced an average of 145 cars and trucks a day and sold 3,254 new vehicles last year, making it the No. 3-ranked U.S. Mercedes dealership based on sales, Daimler said in a statement. The dealership has more than 30,000 active customers.
The new facility "is a brand statement but it's also a functioning business, and it's a profitable business," said Blair Creed, the dealership's general manager. "It's a bit of a laboratory, it's a bit of an incubator, but it's also a very good working model of an effective business."
BMW's plans in Manhattan include opening a new 69,000-square-foot space for its Mini brand across the street from its current store. The Mini store should be completed late this year, and the renovated BMW space should be done by the end of next year, the Munich-based company said.
BMW Manhattan has 32,000 active customers, including Mini owners, servicing 180 to 200 vehicles a day and selling about 2,400 new vehicles last year, including Mini models, said Jeffrey Falk, who heads the dealership.
Moving Mini will free more space at the showroom, which has 228,000 square feet and hasn't been renovated since it opened in 1998.
The current dealership's glass pyramid facade will be replaced with a glass wall and specially designed louvers will be added on the building's exterior to reduce heat and use more daylight.
"It will be a revolutionary change for this facility," Falk said in an interview. "It will set us on a trajectory for the next decade."