In the bad old days of Detroit, Ford (NYSE:F) and its local rivals often used fleet sales as a way to boost tired models, by selling them to rental-car companies at deep discounts. That tactic kept factories busy and made sales numbers seem good for a while, but eventually it eroded profits and crushed resale values.
Some investors still worry when they hear about "fleet sales," but the truth is, Ford doesn't do business like that anymore. Fleet sales are still a very important part of Ford's business, but nowadays they're profitable sales -- and the majority of them aren't to rental-car companies. In this video, Fool contributor John Rosevear looks at Ford's recent fleet sales numbers, and explains why this kind of business might actually be a very good thing for Ford.
Fool contributor John Rosevear owns shares of Ford and General Motors. You can connect with him on Twitter at @jrosevear. The Motley Fool recommends Ford and General Motors and owns shares of Ford. Try any of our Foolish newsletter services free for 30 days. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.