FRANKFURT - Volkswagen's Audi emerged as the clear winner among Germany's luxury carmakers in May, posting a far smaller decline in global vehicle sales than either BMW or Mercedes-Benz.

Audi posted a 6.1 percent drop in sales to 82,800 vehicles -- relatively mild given a sharp collapse in luxury car demand -- while Daimler's Mercedes-Benz brand saw sales fall 12 percent to 86,300 as record sales in China cushioned the blow for both.

BMW brand sales by comparison sank by 18 percent to 90,643 vehicles, although its head of sales attempted to put a positive spin on the hefty decline by noting the rate of contraction was at least subsiding compared with January, February and April.

Sales decreased much more slowly in May than in recent months. Overall, I am cautiously optimistic that our global sales figures will continue to improve over the course of the year, Ian Robertson said in a statement on Monday.

So far, the BMW brand's best performance this year was a 17 percent year-on-year drop in the month of March.

Volumes are not necessarily a reliable indicator for a carmaker's profitability since both the sales mix as well as pricing and incentives play a substantial role.

Nevertheless, Audi was the only one of the big three German luxury carmakers to steer clear of a first-quarter operating loss as the company also benefits from a substantially lower dependence on U.S. sales.

Although Germany saw a 40 percent surge in new car registrations last month, the three premium brands that count their domestic market as a major source of demand all saw a slight contraction in May as Berlin's subsidies to scrap old cars and buy new ones largely favour inexpensive volume brands.

Daimler's diminutive Smart ForTwo failed to profit from the incentives as global volumes dropped 15 percent to 11,000 cars.

Entering into the third year of its lifecycle, it did not materially gain from the scrapping bonus that sent German sales of cars in the ForTwo's market segment up 140 percent last month, led by the new Ford (F.N) Ka and the Hyndai i10.

BMW's cult car Mini managed a 14 percent gain in new registrations last month in Germany, just like the ForTwo, but this paled versus the 93 percent gain in the subcompact segment powered by models like the Seat Ibiza and Ford Fiesta.

(Reporting by Christiaan Hetzner, Editing by Michael Shields)

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