Rating agency Moody's Investors Service said Wednesday that the outlook for the global auto industry had perked up with China and Brazil revving up demand.

Boosted by Chinese demand in particular, global light vehicles sales are set to rise 5.5 percent 2009 to 67.6 million units, Moody's estimated, lifting its forecast from two percent previously.

"Indeed, volumes in China and Brazil in particular have improved, and western Europe is holding up better than expected so far," said Moody's senior vice president of corporate finance Falk Frey said.

"Moreover, the US is on track toward recovery and Japan continues to benefit from incentives," Frey added.

Given the improving outlook, Moody's said credit conditions should improve for the industry over the next 12 to 18 months.

The global auto industry suffered a dramatic slump in the face of the worst recession in generations in many big markets with some governments resorting to costly cash-for-clunkers schemes to prop consumer demand.