NEW YORK ( TheStreet) -- Ford ( F - Get Report) has been doing a good job of reducing its costs says Fitch Ratings and it has subsequently given the automaker an upgrade on its credit facility and term loan.

And the market, in turn, is upgrading Ford stock higher in early morning trading, by 1.6%, soon after the opening bell, to $9.03. This is a continuation of the stock's steady run-up the past month, in which it has climbed from $7.00 at the beginning of November.

Specifically, Fitch has upgraded Ford's senior secured credit facility and term loan to B+/RR1 from B/RR1, with a positive rating outlook.

"The positive outlook reflects the better-than-expected progress on Ford's cost-reduction program, production and inventory discipline that has resulted in solid pricing performance and continued market share gains," the rating agency explains.

On Tuesday Ford announced that it had sold significantly more U.S. cars and crossover vehicles in the month of November -- and is decidedly upbeat about the consumer demand for fuel-efficient vehicles that is driving its results.

Fitch goes on to explain that the upgrade reflected Ford's amended credit facility, which reduces the company's senior secured commitments by $1.9 billion and extends its revolving facility's maturity by two years. Ford's amended revolving credit facility is now $7.2 billion compared with $10.7 billion previously.

Overall, auto industry sales will show only a modest improvement next year, says Fitch. It says that factors such as rising unemployment and a higher savings rate will hinder growth in the auto industry.

"Fitch expects a weak rebound in industry sales in 2010, in part recognizing the hangover from the Cash-for-Clunkers program," the agency says.

But even if U.S. industry sales were to remain flat, Ford's cash drain would be less than a $5 billion, according to Fitch.

Automaker shares have largely advanced in morning trading. Toyota ( TM - Get Report) is up, 0.7% to $82. Honda ( HMC - Get Report) has drifted up 2% to $33. Daimler ( DAI)has risen 0.7% to $53.20. After massive gains in the previous trading session, Tata ( TTM) has fallen 1.8% to $15.60.

-- Reported by Andrea Tse in New York

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