BMW (BAMXY) narrowly outsold Mercedes-Benz (DDAIF) and Lexus (TM) in the U.S. luxury-car market in 2015. The company is fighting to maintain its crown as the world’s largest luxury-car maker and has a serious challenger in Mercedes-Benz.

How they did it

The automaker, it seems, has been quite assertive in paying dealers to buy BMW cars for their fleets of loaner vehicles that customers can use when their car is in the shop. Customers get to experience the latest BMW models for free and enough, it seems, have returned to buy.

BMW said it paid dealers as much as $1,750 a vehicle to put its new models in their service fleets. This helped the German automaker to deliver 346,023 vehicles in the U.S. in 2015, beating Lexus by 1,400 cars and Daimler AG’s Mercedes-Benz by 3,000.

BMW spokesman Kenn Sparks wouldn’t say how much the loaner program affected sales, but did mention that it’s “an important part of BMW’s customer-satisfaction and marketing plan … We encourage our dealers to renew their loaner fleet regularly — the newest models with the latest innovations — and have a full range of BMW on hand.”

BMW compared

To be clear, all three company’s have loaner programs, so BMW hasn’t done anything new or out of the ordinary. It’s simply been more aggressive in its program, running incentives a few times a year versus Mercedes-Benz, which does one about every six months.

BMW also outspent its competitors with its overall incentives to buyers, providing an average of $5,169 per vehicle on discounted lease deals and rebates. That’s about $600 more than Mercedes-Benz and $1,400 more than Lexus.

“Auto companies do things like this all the time to set sales records or make claims that they are the best in show,” said Maryann Keller, an independent auto consultant in Stamford, Conn. “BMW can beat their chest this year. But you can question whether they did it on the same terms as their competitors.”

Is it wise?

This type of aggressive marketing does have its downside, however. BMW’s resale value has dipped recently compared with other luxury cars. A three-year-old BMW, for example, has an average value of 48.4% of the new car price, compared with 49.8% for other luxury brands.

The main problem is that the luxury market is only so big, and aggressively putting out more BMWs may spike sales volume in the short term, but over time, it seems, supply is outpacing demand.

Conclusion

The luxury-car industry is hotter than it has been in a long time. With Mercedes-Benz’s chief executive Dieter Zetsche talking last year about overtaking BMW as the world’s biggest luxury-car maker in the world by 2020, these companies are doing just about everything to steal market share.

But while BMW’s loaner program seems to be working to boost U.S. sales in the short term, it’s possible that we’ll see mid- to long-term issues arise from this aggressive over-saturation of the market.