United Auto Group Reports Q1 1997 Results

7 May 1997

        Company Reports Net Income of $3.3 Million or $0.19 Per Share
                        On Revenues of $388.2 Million

    NEW YORK, May 7 -- United Auto Group, Inc. , the
nation's second largest publicly-traded automotive retailer, today announced a
6.5% increase in revenues for the first quarter of 1997 versus pro forma
revenues for the comparable 1996 period.

    Revenues Increase 48.3% On An Actual Basis
    These results represent a 48.3% increase in revenues on an actual basis
and reflect the addition of 15 dealership franchises over the past year. For
the quarter ended March 31, 1997, revenues were $388.2 million as compared to
pro forma revenues of $364.4 million and actual revenues of $261.7 million in
the comparable prior year period.  Gross profit margin for the quarter
improved to 12.3% from 12.1% on a pro forma basis in the comparable prior year
period.  On an actual basis, gross profit margin was 11.2% for the first
quarter of 1996.

    Earnings Per Share Increase From $0.02 to $0.19 On An Actual Basis
    First quarter net income was $3.3 million as compared to $3.7 million pro
forma net income in 1996, or $171,000 on an actual basis.  Earnings per share
were $0.19 versus $0.21 per share pro forma for the comparable prior year
period, or $0.02 per share on an actual basis.
    Of the $388.2 million in revenues, vehicle sales represented approximately
88%, or $340.8 million; finance and insurance revenues represented
approximately 3%, or $13.5 million; and service and parts revenues of $33.9
million represented the remaining 9%.
    Marshall S. Cogan, the Company's founder, Chairman and Chief Executive
Officer said, "The results for the quarter demonstrate our ability to grow
revenues and earnings.  With the new car franchise as the cornerstone of our
business, our approach links vehicle sales to effective finance and service
programs, both of which continued to experience solid growth in the first
quarter."  He noted that United Auto achieved a 14.3% increase in finance and
insurance revenue and a 13.5% increase in service and parts revenue for the
quarter, on a pro forma basis.
    The Company said that it sold 9,751 new and 5,949 used vehicles during the
first quarter versus 9,530 new and 5,964 used vehicles for the comparable 1996
period on a pro forma basis.
    Selling, general and administrative expenses were $41.8 million, or 10.8%
of total revenue, versus $37.1 million or 10.2% of total revenues in the first
quarter of 1996 on a pro forma basis.
    Mr. Cogan commented:  "We're extremely pleased with our efforts to add in
excess of $900 million in revenues from recent and anticipated acquisitions,
resulting in a projected annual run rate of $2.7 billion.  This success led us
to a strategic decision to build our infrastructure to reflect the needs of an
enterprise of this scale, and, as a result, fixed SG&A expenditures are
disproportionately high for the first quarter.  In subsequent quarters, we
expect to see less impact of these expenditures as we report the increased
revenues resulting from acquisitions."
    Mr. Cogan expressed confidence in the Company's ability to integrate these
and future acquisitions into its dealership network.
    United Auto completed the acquisitions of Las Vegas-based Gary Hanna
Nissan Inc., the largest Nissan dealership in Nevada, and nine Florida and
Long Island dealerships owned by the Staluppi family on April 22, 1997 and
April 30, 1997, respectively.
    The Company expects to complete the previously announced acquisitions of
three Ford dealerships in the Chattanooga and Atlanta markets and three
General Motors Corporation dealerships in the Carolinas during May.
    United Auto operates 50 franchises in Arizona, Arkansas, Connecticut,
Florida, Georgia, New Jersey, Nevada, New York, Tennessee and Texas.  As an
integral part of its dealership operations, United Auto sells used vehicles
and operates eight stand-alone United Auto Mart used vehicle retail centers.
United Auto dealerships market a complete line of aftermarket automotive
products and services through United AutoCare.  The Company also owns Atlantic
Auto Finance Corporation, a finance company engaged in the purchase, sale and
servicing of prime credit quality automobile loans.  The Company expects to
operate 58 franchises upon the completion of the previously announced
acquisitions.
    This press release contains forward-looking information, and actual
results may vary from those expressed or implied herein.  Factors that could
affect these results include those mentioned in the Company's 1996 Annual
Report and Form 10-K on file with the Securities and Exchange Commission.

                           UNITED AUTO GROUP, INC.
              Consolidated Statements of Operations (unaudited)
                        ($ Thousands, except EPS data)

                                             First Quarter
                                         1997             1996           1996
                                       Actual        Pro Forma(a)       Actual
    Auto Dealerships
     Vehicle Sales                 $340,833        $322,803      $233,139
     Finance and Insurance           13,483          11,801         9,942
     Service and Parts               33,884          29,843        18,638
       Total Revenues               388,200         364,447       261,719

    Cost of Sales, including floor
     plan interest                    340,588       320,454       232,502

      Gross Profit                   47,612          43,993        29,217

    Selling, General & Administrative
    Expenses                         41,756          37,112        27,618

    Operating Income                  5,856           6,881         1,599

    Other Income and Interest (Expense) (172)          (85)         (128)

    Income Before Income Taxes -
    Auto Dealerships                  5,684           6,796         1,471

    Auto Finance
     Revenues                           985             412           412
     Interest Expense                 (144)            (86)          (86)
     Operating and Other Expenses     (937)           (590)         (590)

    Loss Before Income Taxes -
    Auto Finance                       (96)           (264)         (264)

    Total Company
      Income before minority interests and
      provision for income taxes      5,588           6,532         1,207
      Minority Interests               (36)              --         (500)
      Provision for Income Taxes    (2,235)         (2,864)         (536)

    Net Income                       $3,317          $3,668          $171

    Earnings Per Share                $0.19           $0.21         $0.02

    Weighted Average shares
     outstanding                     17,758          17,872         7,449

    (a)  The Consolidated Statements of Operations has been restated to
reflect on a pro forma basis the Company's completion of its initial public
offering of 6,250,000 shares on October 28, 1996 and the contemporaneous
acquisitions and other transactions related to the Company's IPO.

SOURCE  United Auto Group, Inc.