Ford Motor Co and General Motors Co posted double-digit sales gains for May that outpaced growth for Toyota Motor Corp <7203.T> as U.S. auto sales rose 19 percent from the depressed levels of a year earlier.

The monthly sales results, viewed as one of the earliest snapshots of American consumer demand, were boosted by stronger sales of trucks and SUVs and stepped-up orders for Detroit-made vehicles by rental car agencies and other fleet operators, including government agencies.

Industry-wide sales topped 1.1 million vehicles, the seventh consecutive month that sales have gained from year-earlier levels as the industry recovers from a crisis that sent sales to the lowest levels since the early 1980s.

Analysts and auto executives said the May sales figures pointed to a continued but gradual U.S. economic recovery that remains held back by uncertainty about the jobs market, housing prices and the impact of the European debt crisis.

May looks solid but I wouldn't say spectacular, said Paul Ballew, economist with Nationwide Mutual Insurance Co and former GM sales analyst. We're not here forecasting a derailment, but we expect the recovery to be pretty choppy.

Ford Motor Co outperformed rivals with a 22 percent sales gain, taking market share along with Hyundai Motor Co <005380.KS>, which posted a 33 percent gain, and the Subaru brand, which saw a 35 percent sales rise.

Ford said it was raising its current quarter production by 2 percent and set its third-quarter production target 16 percent above the level of the prior year.

Ford, which has overtaken Toyota as the No. 2 automaker in the U.S. market this year, also said it was scrapping its niche Mercury brand.

Shares of Ford, which have gained almost 19 percent this year, rose nearly 4 percent on Wednesday.

Toyota Motor Corp <7203.T> lagged with a nearly 7 percent sales gain after opting to keep sales incentives largely flat from the deep discounts that won buyers in March and April.

GM sales were up 17 percent from sales a year earlier when the top U.S. automaker was sliding toward a U.S.-government funded bankruptcy.

Chrysler, which was operating in bankruptcy for all of May, reported a monthly sales gain of 33 percent. For the year to date, the automaker controlled by Fiat SpA is lagging the industry with growth of 8 percent compared with 17 percent for overall vehicle sales.

RETURN OF THE BAD NEWS

Nissan Motor Co <7201.T> reported a 24 percent sales gain but said the month was marked by a renewed sense of caution by consumers watching the job market and housing prices.

The month of May seemed to me to mark the return of some bad economic news, said Al Castignetti, who heads Nissan brand sales in the United States.

In May, the S&P 500 index <.SPX> fell more than 8 percent in its worst monthly slide since February 2009 as investors reacted to the threat that the European debt crisis could trigger a renewed slowdown in the U.S. economy.

Bob Carter, general manager of the Toyota brand in the U.S. market, said showroom traffic had dipped in the middle of the month but had recovered by the Memorial Day weekend.

Toyota, which plans to roll out a new advertising campaign touting its investment in safety in a bid to distance itself from a recent recall crisis, said it would extend some zero-percent financing and cheap lease offers in June.

Honda sales were up 19 percent, in line with the industry-wide gains.

In an encouraging trend for Detroit-based automakers, sales of light trucks, including pickups like the Ford F Series, were up 22 percent in May. S&P equity analyst Efraim Levy said that bounce appeared to point to increased business demand for these more profitable vehicles.

By contrast, sales of luxury vehicles, which confounded forecasts by lagging the market during the downturn, posted sales gains of just 10 percent in May. (Graphic http://link.reuters.com/mez77k)

BMW , which saw a parts shortage halt shipments of most of its 2011 model vehicles in May, reported a sales decline of almost 4 percent for the month.

NO V-SHAPED RECOVERY

On an annualized and adjusted basis, May sales hit a rate of 11.6 million vehicles, according to sales tracking service Autodata Corp. That was up from the 11 million sales rate that had held from January through April, and up from the 27-year low of 10.4 million sales recorded in 2009.

But the retail component of industry-wide sales was closer to 8.8 million vehicles in May, down slightly from 8.9 million in April, a GM representative said.

We had never expected a V-shaped recovery, said GM U.S. sales chief Steve Carlisle.

Even so, GM said May results pointed toward the initial success of its turnaround plan in the year since it filed for Chapter 11 bankruptcy protection in June 2009.

The automaker is aiming for an initial public offering as soon as this year to reduce the U.S. government's ownership stake of nearly 61 percent. Sales of the four brands kept by the reorganized GM -- Chevrolet, Cadillac, Buick and GMC -- were up 32 percent in May.

In a sign of the automaker's success in holding the line on pricing, GM said its average vehicle transaction price was up $3,300 in the year to date compared with an industry-wide price increase of just $1,600.

Edmunds.com, a Web service that tracks auto sales, estimated that the average sales incentive on U.S. auto sales in May was down almost 12 percent from a year earlier at just over $2,600 per vehicle.

(Reporting by Soyoung Kim, Kevin Krolicki and David Bailey; editing by Matthew Lewis)

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