Mercedes is winning the luxury market with an unusual strategy

Mercedes-Benz is having a very solid year. Even though growth so far this year is flat, the three-pointed star is still setting the pace for the luxury car sales in the US.

For the month of July, Mercedes-Benz's US operation set a new company record with 28,523 cars sold - an increase of 3.6% over the same period last year.

As result, Mercedes is leading the way in sales among the group of companies considered to be "tier one" luxury brands. It's a star-studded group which also includes BMW, Lexus, and the new-comer to the group - Audi.

"We are continuing to see strong momentum build into the third quarter, fueled by the recent launch of three of our dream cars," MBUSA president and CEO Dietmar Exler said in a statement. "The S-Class Cabriolet, SL and SLC Roadsters, teamed with strong momentum for the all-new E-Class helped us set a new record for July."

What is interesting is that Mercedes is leading the way by selling a ton of cars in a market that craves crossovers and SUVs.

So far this year, MBUSA's best selling model is the C-Class with almost 44,000 cars sold, while its third best selling model is the E-Class with nearly 28,000 in sales. That doesn't mean the company's SUVs aren't selling. In fact, they are selling very well.

Mercedes' lineup of SUVs consisting of the GLC, GLE, and GLS are either performing on par with or out selling its rivals from BMW and Audi.

Of the "tier one" luxury brands, only Lexus sells more SUVs that Mercedes. After all, the Lexus RX is the king of luxury crossover SUV.

Finishing second in the sales race in July is Lexus with 27,890 cars sold - followed by BMW at 25,777 and Audi at 18,364.

So far this year, MBUSA has sold 191,300 cars. Here too, Mercedes has a lead over the roughly 179,000 cars Lexus and BMW have each sold. Even though Audi sales are up 3.6% through the first seven months of 2016, the VW Group brand sits in fourth place with 115,298 cars sold.