BMW said in a statement that it sold a total 1.845 million vehicles last year, an increase of 10.6 percent over 2011, while rival Audi, a unit of Volkswagen, was able to lift its sales by 11.7 percent to 1.455 million units.
In December alone, BMW sold 181,571 vehicles, which represents a rise of 14.8 percent year-on-year, while Audi did not fare quite as well, lifting sales by a much more modest 0.8 percent to 110,400 units.
"2012 was a very successful year for us," boasted BMW's sales and marketing chief Ian Robertson.
"The BMW group achieved its best ever sales result for the second year in a row and expanded its lead in the premium segment," Robertson said.
And he continued: "We enter the new year with positive momentum and despite the prevailing headwinds in some markets, we aim to achieve another record year in sales in 2013."
Audi's sales and marketing chief Luca de Meo said: "Audi ran up new records in all regions in 2012."
In Europe, too, "we grew against the negative market trend and extended our lead as the strongest premium brand," de Meo said.
He attributed the carmaker's success to new models, including the new four wheel drive Audi Q3.
Both BMW and Audi said strong demand from outside Europe was the main driver of their success.
In BMW's case, while European sales edged up by 0.8 percent in 2012, sales in Asia raced ahead by 31.6 percent, with Chinese sales soaring by 40.4 percent. In the Americas, sales were up 11.9 percent last year, BMW said.
Audi's US sales sped ahead by 18.5 percent and its Asian sales roared 28.1 percent higher, with Chinese sales up by 29.6 percent and sales in India by as much as 63.4 percent.
In Europe, its biggest market, Audi reported a 1.8 percent increase in unit sales.