SECURITIES AND EXCHANGE COMMISSION
                           Washington, D.C. 20549

                                Form 10-KSB
[x] ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 
    1934 FOR THE FISCAL YEAR ENDED DECEMBER 31, 1996

[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
    OF 1934 FOR THE TRANSITION PERIOD FROM _________ TO __________

                         Commission File No. 0-28102
                                             -------

                             BONDED MOTORS, INC.
                             -------------------
               (Name of small business issuer in its charter) 

California                                                      95-2698520   
----------                                                      ----------
(State or other jurisdiction of                              (I.R.S. Employer
incorporation or organization)                              Identification No.)

7522 South Maie Avenue, Los Angeles, CA                           90001
---------------------------------------                           -----
(Address of principal executive offices)                         Zip Code

Issuer's telephone number: (213) 583-8631
                           --------------

Securities registered under Section 12(b) of the Act: None

Securities registered under Section 12(g) of the Act: Common Stock

Check whether the issuer: (1) filed all reports required to be filed by Section
13 or 15(d) of the Securities Exchange Act during the past 12 months (or for 
such shorter period that the registrant was required to file such reports), and
(2) has been subject to such filing requirements for the past 90 days.

                               Yes [x]   No [_]

Check if disclosure of delinquent filers in response to Item 405 of Regulation
S-B is not contained in this form, and no disclosure will be contained, to the
best of registrant's knowledge, in definitive proxy or information statements 
incorporated by reference in Part III of this Form 10-KSB or any amendment to 
this form 10-KSB. [   ] 

Issuer's revenues for its most recent fiscal year: $18,636,604.

The aggregate market value, calculated on the basis of the closing price of 
such stock on the National Association of Securities Dealers Automated 
Quotation System, of the voting stock held by non-affiliates of the Registrant
at March 11, 1997 was approximately $27,026,460.

There were 3,002,940 shares of common stock outstanding at March 11, 1997

Part III of the Registrant's Proxy Statement relating to its 1996 Annual 
Meeting of Shareholders is incorporated by reference herein.
<PAGE>
PART II

ITEM 5. MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS.

The Company's Common Stock, no par value, (the "Common Stock"), commenced
trading on April 2, 1996 on the over-the-counter market and is quoted on the
National Association of Securities Dealers' Automated Quotation ("NASDAQ")
National Market under the symbol BMTR.  The following table sets forth the high
and low bid prices for the common stock during each quarter of fiscal 1996 as
reported by NASDAQ.  The prices reported reflect inter-dealer quotations, may
not represent actual transactions and do not include retail mark-ups,
mark-downs or commissions.

                                               Fiscal 1996
                                              High       Low
Second Quarter                               9 5/8      6 3/8
Third Quarter                                8 3/8      6 1/4
Fourth Quarter                               11 1/8     6 1/2

As of December 31, 1996, there were 3,002,940 shares of Common Stock
outstanding held by approximately 250 holders of record.

The Company has not declared or paid dividends on the Common Stock in the past
fiscal year.

The declaration of dividends and analysis in the future will be at the election
of the Board of Directors and depend upon earnings, capital requirements and
financial position of the Company, general economic conditions, state law
requirements and other factors.  The Company does not expect to pay dividends
in the foreseeable future.

ITEM 6. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULT
OF OPERATIONS

General

The following discussion analysis should be read in conjunction with the
financial statements and notes thereto appearing elsewhere herein.

Rider for Bonded Motors, Inc. Form 10-KSB

This Form 10-KSB contains forward-looking statements including, without
limitation, statements relating to the Company's plans, expectations,
intentions, and adequate resources, and are made pursuant to the "safe harbor"
provisions of the Private Securities Litigation Reform Act of 1995.  The words
"believes," "intends," "expects," "plans," "anticipates," "estimates," or
"potential" and similar expressions identify forward-looking statements.  The
Company does not undertake to update, revise or correct any of the forward-
looking information.  Actual results may differ materially from those expressed
in any forward-looking statement made by, or on behalf of, the Company.  Some
important factors that could cause the Company's actual results or expectations
to differ materially from those discussed in the forward-looking statements
include, but are not limited to, loss of the Company's significant customers,
changes in consumer demand for remanufactured automobile engines, weather, fuel
costs and availability, regulatory action, Federal and State legislation, labor
strikes, maintenance and capital expenditures and local economic conditions.



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