The logo of Mercedes Benz is seen on top of a car factory against the background of an overcast sky in the central Hungarian town of Kecskemet, 90 km (56 miles) south of Budapest January 25, 2013. [Photo /Agencies]

Daimler's Mercedes-Benz division will push output to a new record this year as German plants are running extra shifts to meet strong demand for new compact models as well as the overhauled S-Class flagship sedan.

Production of Mercedes-Benz models will exceed 1.49 million cars this year, the third straight annual record, the carmaker said on Tuesday.

Mercedes is expanding production as auto demand in core European markets is stabilizing. New car sales in the European Union and European Free Trade Association posted their third monthly gain in November, boosting carmakers' hopes of a rebound in 2014 after six consecutive years of decline.

Workers assembling the new C-Class model in Bremen are running 10 extra shifts in November and December, while staff in Rastatt put in 21 additional shifts on production of A-Class and B-Class compacts in the first eleven months, the carmaker said.

Assembly times for the S-Class have been lengthened since early November and will be extended further in 2014.

Global sales of Mercedes-Benz models rose to their highest-ever level in November, powered by double-digit growth in the United States and China. Year-to-date deliveries were up 10.7 percent at a record 1.32 million autos.

Mercedes dropped into third place in the global luxury-sales race behind Volkswagen's Audi and BMW in 2011, though is counting on a plan to roll out 13 all-new models by 2020 to help it surpass its German rivals.