09:17 AM EST, 11/05/2024 (MT Newswires) -- Far from falling in line with the generally weaker run of Canadian data in Q3, new vehicle sales surprised to the upside in October, rising 8.8% year over year, said Bank of Montreal (BMO).

Even with two more selling days than last October, the seasonally adjusted figure was the third highest this year at nearly two million units annualized and that pushed up year-to-date sales to 8.2%, noted the bank.

The strong Canadian performance even managed to outshine a sturdy print for the United States, pointed out BMO.

New vehicle purchases, which were up 4.1% year over year to 16.1 million units -- not something the bank is used to saying for Canadian macro data of late.

October's healthy new vehicle sales highlight some potential upside risk to consumer spending -- particularly in Canada -- and

this is all coming before there has been a meaningful easing of vehicle financing rates commensurate with the 125 bps -- or 50 bps in the US -- of policy rate cuts, stated BMO.

One other wrinkle to keep an eye on is whether the bank continues to see a rotation toward smaller, cheaper vehicles as consumers trade down -- on size -- to make their monthly payment manageable, added the bank.