Luxury carmakers including Bayerische Motoren Werke AG and Daimler AG posted strong gains in U.S. sales last month, helped by cheaper models and fashionable crossover vehicles, as brands gained traction with new buyers enjoying rising disposable income.

The BMW brand boosted sales in May by 17 percent, helped by an 81 percent jump in deliveries of SUVs and crossover utility vehicles, like the X3, which more than doubled to 5,723 from a year earlier.

Daimler AG's Mercedes brand reported a 7.7 percent increase to 26,617 deliveries, led by a 25 percent gain in sales of the E-Class sedan and an 83 percent jump in the top-of-the-line S- Class.

 Mercedes, BMW and Audi are among luxury-auto makers expanding with lower-cost models as they seek to capture new buyers while retaining wealthier customers loyal to their market. The strategy is hitting home as the vehicles attract individuals including younger people new to the luxury market, whose wealth is increasing as real estate values rise and interest rates stay low.

BMW's sales last month were 29,602, helping it overtake Mercedes-Benz as the top-selling U.S. luxury brand so far this year. In 2014 so far, Munich-based BMW has sold 127,181 vehicles, a 12 percent increase from a year ago, topping Mercedes' total by more than 2,000. Mercedes has sold 125,118 vehicles, a 6.5 percent increase. (Bloomberg)