Light truck sales, a strong labour market and the threat of higher interest rates later this year drove record-setting new-vehicle sales in January, analysts say.
Canadians bought so many new vehicles in January that it set the stage for 2.1 million in annual sales, Scotiabank says.
It was just one month, but automakers sold a record 117,785.
Light trucks powered sales, with volumes surging nine per cent above the same month a year earlier. The increase represents a further acceleration in light truck sales, up half a percentage point from the 8.5 per cent year-over-year increase reported during all of 2017.
Car sales declined three per cent below a year earlier, with 13 automakers reporting lower car sales last month.
Foreign automakers saw the biggest gains in light truck sales with their volumes surging 17 per cent.
For example, Toyota Tacoma sales were up 24.3 per cent to 1,018 units while the automaker’s Tundra sales rose 20.3 per cent to 711.
Meanwhile, Ford’s popular F series saw its sales drop 16.4 per cent while FCA’s Ram pickup fell 17 per cent.
Light trucks earned 73.2 per cent of the market, according to DesRosiers Automotive Consultants.
While there were warnings of lower levels of consumer confidence and uncertainties around the fate of the North American Free Trade Agreement, auto sales "bucked that trend in a big way," GAC President David Adams said.
"The gains reflect a strong labor market, which advanced last year at the fastest pace of the past decade," Scotiabank analyst Carlos Gomes said, noting that job growth overpowers other economic variables for auto sales.
DesRosiers suspects increasing interest rates may have prompted more buyers to lock in a low interest rate in January.
The Bank of Canada raised its interest rate last month for the third time in seven months. It upped the key rate to 1.25 per cent. Banks followed suit.
DesRosiers says it's too early to predict where the market will end in 2018. Canadians last year purchased more than two million vehicles for the first time.
The Canadian Press and Reuters contributed to this report.