Auto sales in the U.S. were stronger than expected in September, and the Standard & Poor's ratings service expects them to improve during the rest of the year, despite economic uncertainty.
S&P said in a report to investors that pent-up demand for large trucks, revived production from Japanese automakers, stable gas prices and modestly hire incentives contributed to last month's 10 percent sales increase over September of 2010.
The company also said it expects better deals for consumers toward the end of the year.
September sales, when calculated at an annual rate and adjusted for seasonal differences, were 13.1 million cars and trucks, the strongest month since April.
S&P expects full-year sales for 2011 to be up about 9 percent from last year, ending the year at 12.6 million vehicles.
Japanese automakers, mainly Toyota Motor Corp. and Honda Motor Co., were forced to cut factory output due to parts shortages caused by the March earthquake and tsunami in Japan. S&P credit analyst Robert Schulz said in the report that the return of Honda and Toyota to nearly full production and an aging U.S. vehicle fleet should help bring strong sales in the fourth quarter.
The average age of a vehicle in the U.S. has risen to a record 10.6 years, according to the Polk data collection company.
"The rising average age of vehicles should support some of the pent-up demand currently countered by economic and financial uncertainty," Schulz wrote.
General Motors Co. and Ford Motor Co. did not report any significant increase in incentives such as cash rebates during September, but S&P sees better prices for consumers later in the year as the Japanese automakers try to regain sales lost during the production slowdowns.
"We believe overall vehicle prices could potentially ease late in the year as competitors (e.g. Toyota and Honda) boost inventory and incentives, and other companies respond," the S&P report said.