<PAGE>   1
                       SECURITIES AND EXCHANGE COMMISSION

                             WASHINGTON, D.C. 20549

                                    FORM 10-Q


[X]  QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF 
     THE SECURITIES EXCHANGE ACT OF 1934 
     FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 1998

                                       OR

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


                         Commission file number 0-27496

                       CRONOS GLOBAL INCOME FUND XVI, L.P.
             (Exact name of registrant as specified in its charter)


          California                                            94-3230380
(State or other jurisdiction of                              (I.R.S. Employer
 incorporation or organization)                             Identification No.)

         444 Market Street, 15th Floor, San Francisco, California 94111
           (Address of principal executive offices)        (Zip Code)

                                 (415) 677-8990
              (Registrant's telephone number, including area code)


Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 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 [ ]


<PAGE>   2
                       CRONOS GLOBAL INCOME FUND XVI, L.P.

                  REPORT ON FORM 10-Q FOR THE QUARTERLY PERIOD
                            ENDED SEPTEMBER 30, 1998

                                TABLE OF CONTENTS


<TABLE>
<CAPTION>
                                                                                                                           PAGE
<S>          <C>                                                                                                           <C>
PART I -- FINANCIAL INFORMATION

  Item 1.    Financial Statements

             Balance Sheets - September 30, 1998 (unaudited) and December 31, 1997                                           4

             Statements of Operations for the three and nine months ended September 30, 1998 and 1997 (unaudited)            5

             Statements of Cash Flows for the nine months ended September 30, 1998 and 1997 (unaudited)                      6

             Notes to Financial Statements (unaudited)                                                                       7

  Item 2.    Management's Discussion and Analysis of Financial Condition and Results of Operations                          10

  Item 3.    Quantitative and Qualitative Disclosures About Market Risk                                                     12

PART II-- OTHER INFORMATION

  Item 1.    Legal Proceedings                                                                                              13

  Item 3.    Defaults Upon Senior Securities                                                                                14

  Item 5.    Other Information                                                                                              14

  Item 6.    Exhibits and Reports on Form 8-K                                                                               16
</TABLE>


                                       2
<PAGE>   3
                         PART I - FINANCIAL INFORMATION


  Item 1.   Financial Statements

            Presented herein are the Registrant's balance sheets as of September
            30, 1998 and December 31, 1997, statements of operations for the
            three and nine months ended September 30, 1998 and 1997, and
            statements of cash flows for the nine months ended September 30,
            1998 and 1997.


                                       3
<PAGE>   4
                       CRONOS GLOBAL INCOME FUND XVI, L.P.

                                 BALANCE SHEETS

                                   (UNAUDITED)


<TABLE>
<CAPTION>
                                                                                      September 30,           December 31,
                                                                                          1998                   1997
                                                                                      -------------          -------------
<S>                                                                                   <C>                    <C>      

                        Assets

Current assets:
    Cash and cash equivalents, includes $1,772,296 at September 30, 1998 and
        $1,231,959 at December 31, 1997 in interest-bearing accounts                  $   1,772,396          $   1,232,159
    Net lease receivables due from Leasing Company
        (notes 1 and 2)                                                                     466,515                572,740
                                                                                      -------------          -------------

            Total current assets                                                          2,238,911              1,804,899
                                                                                      -------------          -------------

Container rental equipment, at cost                                                      26,708,429             26,755,856
    Less accumulated depreciation                                                         3,609,166              2,442,049
                                                                                      -------------          -------------
        Net container rental equipment                                                   23,099,263             24,313,807
                                                                                      -------------          -------------

Organizational costs, net                                                                   143,125                180,594
                                                                                      -------------          -------------

                                                                                      $  25,481,299          $  26,299,300
                                                                                      =============          =============
                 Partners' Capital

Partners' capital (deficit):
    General partner                                                                   $      (4,264)         $      (4,653)
    Limited partners                                                                     25,485,563             26,303,953
                                                                                      -------------          -------------

            Total partners' capital                                                      25,481,299             26,299,300
                                                                                      -------------          -------------

                                                                                      $  25,481,299          $  26,299,300
                                                                                      =============          =============
</TABLE>


   The accompanying notes are an integral part of these financial statements.


                                       4
<PAGE>   5
                       CRONOS GLOBAL INCOME FUND XVI, L.P.

                            STATEMENTS OF OPERATIONS

                                   (UNAUDITED)


<TABLE>
<CAPTION>
                                                                Three Months Ended                      Nine Months Ended
                                                          ---------------------------------       ---------------------------------
                                                          September 30,       September 30,       September 30,       September 30,
                                                               1998                1997                1998                1997
                                                          -------------       -------------       -------------       -------------
<S>                                                       <C>                 <C>                 <C>                 <C>      

Net lease revenue (notes 1 and 3)                         $     784,340       $     845,974       $   2,265,449       $   2,277,885

Other operating expenses:
    Depreciation and amortization                               402,835             403,594           1,209,298           1,197,543
    Other general and administrative expenses                    16,334              15,785              47,231              48,546
                                                          -------------       -------------       -------------       -------------
                                                                419,169             419,379           1,256,529           1,246,089
                                                          -------------       -------------       -------------       -------------

        Earnings from operations                                365,171             426,595           1,008,920           1,031,796

Other income:
    Interest income                                              22,525              14,152              58,827              56,875
    Net gain on disposal of equipment                               419               3,068               8,656               6,420
                                                          -------------       -------------       -------------       -------------
                                                                 22,944              17,220              67,483              63,295
                                                          -------------       -------------       -------------       -------------

        Net earnings                                      $     388,115       $     443,815       $   1,076,403       $   1,095,091
                                                          =============       =============       =============       =============

Allocation of net earnings:
    General partner                                       $      29,554       $      32,734       $      95,106       $      89,647
    Limited partners                                            358,561             411,081             981,297           1,005,444
                                                          -------------       -------------       -------------       -------------

                                                          $     388,115       $     443,815       $   1,076,403       $   1,095,091
                                                          =============       =============       =============       =============

Limited partners' per unit share of net earnings          $        0.22       $        0.41       $        0.61       $        1.00
                                                          =============       =============       =============       =============
</TABLE>


   The accompanying notes are an integral part of these financial statements.


                                       5
<PAGE>   6
                       CRONOS GLOBAL INCOME FUND XVI, L.P.

                            STATEMENTS OF CASH FLOWS

                                   (UNAUDITED)


<TABLE>
<CAPTION>
                                                                             Nine Months Ended
                                                                     -----------------------------------
                                                                     September 30,         September 30,
                                                                         1998                  1997
                                                                     -------------         -------------
<S>                                                                  <C>                   <C>          

Net cash provided by operating activities                            $   2,356,442         $   1,979,384

Cash flows provided by (used in) investing activities:
    Proceeds from disposal of equipment                                     78,133                12,500
    Purchase of container rental equipment                                    --              (2,339,370)
    Acquisition fees paid to general partner                                  --                (117,116)
                                                                     -------------         -------------

        Net cash provided by (used in) investing activities                 78,133            (2,443,986)
                                                                     -------------         -------------

Cash flows provided by (used in) financing activities:
    Capital contributions                                                     --               1,931,060
    Underwriting commissions                                                  --                (193,196)
    Offering and organizational expenses                                      --                (101,336)
    Distribution to partners                                            (1,894,338)           (1,808,503)
                                                                     -------------         -------------


        Net cash used in financing activities                           (1,894,338)             (171,975)
                                                                     -------------         -------------

Net increase (decrease) in cash and cash equivalents                       540,237              (636,577)


Cash and cash equivalents at January 1                                   1,232,159             1,755,884
                                                                     -------------         -------------


Cash and cash equivalents at September 30                            $   1,772,396         $   1,119,307
                                                                     =============         =============
</TABLE>


   The accompanying notes are an integral part of these financial statements.


                                       6
<PAGE>   7
                       CRONOS GLOBAL INCOME FUND XVI, L.P.

                     NOTES TO UNAUDITED FINANCIAL STATEMENTS


(1)    Summary of Significant Accounting Policies

       (a)  Nature of Operations

            Cronos Global Income Fund XVI, L.P. (the "Partnership") is a limited
            partnership organized under the laws of the State of California on
            September 1, 1995, for the purpose of owning and leasing marine
            cargo containers, special purpose containers and container related
            equipment. Cronos Capital Corp. ("CCC") is the general partner and,
            with its affiliate Cronos Containers Limited (the "Leasing
            Company"), manages and controls the business of the Partnership. The
            Partnership shall continue until December 31, 2015, unless sooner
            terminated upon the occurrence of certain events.

            The Partnership commenced operations on March 29, 1996, when the
            minimum subscription proceeds of $2,000,000 were received from over
            100 subscribers (excluding from such count Pennsylvania residents,
            the general partner, and all affiliates of the general partner). On
            February 3, 1997, CCC suspended the offer and sale of units in the
            Partnership. The offering terminated on December 27, 1997.

            As of September 30, 1998, the Partnership owned and operated 3,835
            twenty-foot, 1,046 forty-foot and 459 forty-foot high-cube marine
            dry cargo containers, 90 twenty-foot and 299 forty-foot refrigerated
            containers, and 52 twenty-four thousand-liter tanks.

       (b)  Leasing Company and Leasing Agent Agreement

            The Partnership has entered into a Leasing Agent Agreement whereby
            the Leasing Company has the responsibility to manage the leasing
            operations of all equipment owned by the Partnership. Pursuant to
            the Agreement, the Leasing Company is responsible for leasing,
            managing and re-leasing the Partnership's containers to ocean
            carriers and has full discretion over which ocean carriers and
            suppliers of goods and services it may deal with. The Leasing Agent
            Agreement permits the Leasing Company to use the containers owned by
            the Partnership, together with other containers owned or managed by
            the Leasing Company and its affiliates, as part of a single fleet
            operated without regard to ownership. Since the Leasing Agent
            Agreement meets the definition of an operating lease in Statement of
            Financial Accounting Standards (SFAS) No. 13, it is accounted for as
            a lease under which the Partnership is lessor and the Leasing
            Company is lessee.

            The Leasing Agent Agreement generally provides that the Leasing
            Company will make payments to the Partnership based upon rentals
            collected from ocean carriers after deducting direct operating
            expenses and management fees to CCC and the Leasing Company. The
            Leasing Company leases containers to ocean carriers, generally under
            operating leases which are either master leases or term leases
            (mostly two to five years). Master leases do not specify the exact
            number of containers to be leased or the term that each container
            will remain on hire but allow the ocean carrier to pick up and drop
            off containers at various locations; rentals are based upon the
            number of containers used and the applicable per-diem rate.
            Accordingly, rentals under master leases are all variable and
            contingent upon the number of containers used. Most containers are
            leased to ocean carriers under master leases; leasing agreements
            with fixed payment terms are not material to the financial
            statements. Since there are no material minimum lease rentals, no
            disclosure of minimum lease rentals is provided in these financial
            statements.


                                                                     (Continued)
                                       
                                       7
<PAGE>   8
                       CRONOS GLOBAL INCOME FUND XVI, L.P.

                     NOTES TO UNAUDITED FINANCIAL STATEMENTS


       (c)  Basis of Accounting

            The Partnership utilizes the accrual method of accounting. Net lease
            revenue is recorded by the Partnership in each period based upon its
            leasing agent agreement with the Leasing Company. Net lease revenue
            is generally dependent upon operating lease rentals from operating
            lease agreements between the Leasing Company and its various
            lessees, less direct operating expenses and management fees due in
            respect of the containers specified in each operating lease
            agreement.

       (d)  Financial Statement Presentation

            These financial statements have been prepared without audit. Certain
            information and footnote disclosures normally included in financial
            statements prepared in accordance with generally accepted accounting
            procedures have been omitted. It is suggested that these financial
            statements be read in conjunction with the financial statements and
            accompanying notes in the Partnership's latest annual report on Form
            10-K.

            The preparation of financial statements in conformity with generally
            accepted accounting principles (GAAP) requires the Partnership to
            make estimates and assumptions that affect the reported amounts of
            assets and liabilities and disclosure of contingent assets and
            liabilities at the date of the financial statements and the reported
            amounts of revenues and expenses during the reported period. Actual
            results could differ from those estimates.

            The interim financial statements presented herewith reflect all
            adjustments of a normal recurring nature which are, in the opinion
            of management, necessary to a fair statement of the financial
            condition and results of operations for the interim periods
            presented.


(2)    Net Lease Receivables Due from Leasing Company

       Net lease receivables due from the Leasing Company are determined by
       deducting direct operating payables and accrued expenses, base management
       fees payable, and reimbursed administrative expenses payable to CCC and
       its affiliates from the rental billings payable by the Leasing Company to
       the Partnership under operating leases to ocean carriers for the
       containers owned by the Partnership. Net lease receivables at September
       30, 1998 and December 31, 1997 were as follows:


<TABLE>
<CAPTION>
                                                                          September 30,        December 31,
                                                                               1998                1997
                                                                          -------------       -------------
<S>                                                                       <C>                 <C>    
       Lease receivables, net of doubtful accounts of $92,391
          at September 30, 1998 and $61,992 at December 31, 1997          $     871,269       $   1,051,836
       Less:
       Direct operating payables and accrued expenses                           262,621             326,518
       Damage protection reserve                                                 59,547              60,999
       Base management fees                                                      63,131              70,754
       Reimbursed administrative expenses                                        19,455              20,825
                                                                          -------------       -------------

                                                                          $     466,515       $     572,740
                                                                          =============       =============
</TABLE>

                                                                     (Continued)


                                       8
<PAGE>   9
                       CRONOS GLOBAL INCOME FUND XVI, L.P.

                     NOTES TO UNAUDITED FINANCIAL STATEMENTS


(3)    Net Lease Revenue

       Net lease revenue is determined by deducting direct operating expenses,
       base management fees and reimbursed administrative expenses to CCC and
       its affiliates from the rental revenue billed by the Leasing Company
       under operating leases to ocean carriers for the containers owned by the
       Partnership. Net lease revenue for the three and nine-month periods ended
       September 30, 1998 and 1997 was as follows:


<TABLE>
<CAPTION>
                                                          Three Months Ended                       Nine Months Ended
                                                    --------------------------------        ---------------------------------
                                                    September 30,       September 30,       September 30,       September 30,
                                                         1998                1997                1998                1997
                                                    -------------       -------------       -------------       -------------
<S>                                                 <C>                 <C>                 <C>                 <C>          

       Rental revenue                               $   1,067,906       $   1,137,301       $   3,205,067       $   3,174,034
       Less:
       Rental equipment operating expenses                148,255             149,933             540,663             501,352
       Base management fees                                73,763              78,989             220,177             220,689
       Reimbursed administrative expenses                  61,548              62,405             178,778             174,108
                                                    -------------       -------------       -------------       -------------

                                                    $     784,340       $     845,974       $   2,265,449       $   2,277,885
                                                    =============       =============       =============       =============
</TABLE>


                                       9
<PAGE>   10
Item 2.   Management's Discussion and Analysis of Financial Condition and
          Results of Operations

It is suggested that the following discussion be read in conjunction with the
Registrant's most recent annual report on Form 10-K.


1)     Material changes in financial condition between September 30, 1998 and
       December 31, 1997.

       At September 30, 1998, the Registrant had $1,772,396 in cash and cash
       equivalents, an increase of $540,237 from the December 31, 1997 cash
       balances. At September 30, 1998, the Registrant had approximately $98,000
       in cash generated from equipment sales reserved as part of its cash
       balances.

       The Registrant's cash distribution from operations for the third quarter
       of 1998 was 7.5% (annualized) of the limited partners' original capital
       contribution, unchanged from the second quarter of 1998. These
       distributions are directly related to the Registrant's results from
       operations and may fluctuate accordingly.

       During the third quarter of 1998, the economic troubles in Asia, as
       evidenced by devalued currencies, restricted credit, and negative
       economic growth, continued to impact the growth of containerized trade.
       Significant trade imbalances, combined with a drop in trade volumes in
       some locations, continued to challenge the container leasing industry,
       with a corresponding effect on the Registrant's operating performance.
       The devaluation of the Asian currencies has led to an increase in exports
       from Asia, creating a strong demand for containers in that area of the
       world. However, the devalued currencies, together with the effects of
       restricted credit, have also reduced the demand in Asia for imports from
       the West. This has resulted in lower demand for containers in Europe and
       North America. In addition, turmoil in other financial markets, such as
       Japan and Russia, threatens to spread to Latin America and other emerging
       markets. As a result of these factors, the Registrant does not foresee
       any significant change in market conditions in the near future. However,
       in response to the current market conditions, the Registrant has been
       repositioning containers from low to higher demand locations in order to
       reduce its idle inventory. The Registrant will selectively continue to
       reposition available equipment when it believes that the impact will have
       a positive effect on its operations.

2)     Material changes in the results of operations between the three and
       nine-month periods ended September 30, 1998 and 1997.

       Net lease revenue for the three and nine-month periods ended September
       30, 1998 was $784,340 and $2,265,449, respectively, a decrease of 7% and
       less than 1% from the respective three and nine-month periods in the
       prior year. Gross rental revenue (a component of net lease revenue) for
       the three and nine-month periods ended September 30, 1998 was $1,067,906
       and $3,205,067, respectively, reflecting a decrease of 6% and an increase
       of less than 1% from the respective three and nine-month periods in the
       prior year. Dry container average per-diem rental rates for the three and
       nine-month periods ended September 30, 1998 decreased 3% and 1%,
       respectively, when compared to the same three and nine-month periods in
       the prior year. Refrigerated container average per-diem rental rates for
       the three and nine-month periods ended September 30, 1998 increased 1%
       and decreased 1%, respectively, when compared to the same three and
       nine-month periods in the prior year. Tank container average per-diem
       rental rates for the three and nine-month periods ended September 30,
       1998 declined 8% and 9%, respectively, when compared to the same periods
       in the prior year.


                                       10
<PAGE>   11
       The Registrant's average fleet size and utilization rates for the three
       and nine-month periods ended September 30, 1998 and 1997 were as follows:


<TABLE>
<CAPTION>
                                                              Three Months Ended              Nine Months Ended
                                                        -----------------------------   -----------------------------
                                                        September 30,   September 30,   September 30,   September 30,
                                                            1998            1997            1998            1997
                                                        -------------   -------------   -------------   -------------
<S>                                                     <C>             <C>             <C>             <C>  

       Average fleet size (measured in twenty-
           foot equivalent units (TEU))
               Dry cargo containers                             6,845           6,862           6,848           6,749
               Refrigerated containers                            688             690             689             690
               Tank containers                                     52              52              52              52
       Average Utilization
               Dry cargo containers                                81%             88%             81%             84%
               Refrigerated containers                             98%             99%             98%             96%
               Tank containers                                     84%             91%             86%             88%
</TABLE>


       Rental equipment operating expenses were 14% and 17%, respectively, of
       the Registrant's gross lease revenue during the three and nine-month
       periods ended September 30, 1998, as compared to 13% and 16%,
       respectively, during the same three and nine-month periods ended
       September 30, 1997.

       Year 2000

       The Registrant relies upon the financial and operational systems provided
       by the Leasing company and its affiliates, as well as the systems
       provided by other independent third parties to service the three primary
       areas of its business: investor processing/maintenance; container
       leasing/asset tracking; and accounting finance. The Registrant has
       received confirmation from its third-party investor
       processing/maintenance vendor that their system is Year 2000 compliant.
       The Registrant does not expect a material increase in its vendor
       servicing fee to reimburse Year 2000 costs. Container leasing/asset
       tracking and accounting/finance services are provided to the Registrant
       by CCC and its affiliate, Cronos Containers Limited (the "Leasing
       Company"), pursuant to the respective Limited Partnership Agreement and
       Leasing Agent Agreement. CCC and the Leasing Company have initiated a
       program to prepare their systems and applications for the Year 2000.
       Preliminary studies indicate that testing, conversion and upgrading of
       system applications is expected to cost CCC and the Leasing Company less
       than $500,000. Pursuant to the Limited Partnership Agreement, CCC or the
       Leasing Company, may not seek reimbursement of data processing costs
       associated with the Year 2000 program. The financial impact of making
       these required system changes is not expected to be material to the
       Registrant's financial position, results of operations or cash flows.

       Cautionary Statement

       This Quarterly Report on Form 10-Q contains statements relating to future
       results of the Registrant, including certain projections and business
       trends, that are "forward-looking statements" as defined in the Private
       Securities Litigation Reform Act of 1995. Actual results may differ
       materially from those projected as a result of certain risks and
       uncertainties, including but not limited to changes in: economic
       conditions; trade policies; demand for and market acceptance of leased
       marine cargo containers; competitive utilization and per-diem rental rate
       pressures; as well as other risks and uncertainties, including but not
       limited to those described in the above discussion of the marine
       container leasing business under Item 2., Management's Discussion and
       Analysis of Financial Condition and Results of Operations; and those
       detailed from time to time in the filings of Registrant with the
       Securities and Exchange Commission.


                                       11
<PAGE>   12
Item 3.  Quantitative and Qualitative Disclosures About Market Risk

Not applicable.


                                       12
<PAGE>   13
                           PART II - OTHER INFORMATION


Item 1.    Legal Proceedings

           As reported in the Registrant's Current Report on Form 8-K and
           Amendment No. 1 to Current Report on Form 8-K, filed with the
           Commission on February 7, 1997 and February 26, 1997, respectively,
           Arthur Andersen, London, England, resigned as auditors of the Cronos
           Group, a Luxembourg corporation headquartered in Orchard Lea, England
           (the "Parent Company"), on February 3, 1997.

           The Registrant retained a new auditor, Moore Stephens, P.C. on April
           10, 1997, as reported in its Current Report on Form 8-K, filed April
           14, 1997.

           In connection with its resignation, Arthur Andersen also prepared a
           report pursuant to Section 10A(b)(2) of the Securities Exchange Act
           of 1934 as amended, for filing by the Parent Company with the
           Securities and Exchange Commission ("SEC") citing its inability to
           obtain what it considered to be adequate responses to its inquiries
           primarily regarding the payment of $1.5 million purportedly in
           respect of professional fees relating to a proposed strategic
           alliance. This sum was returned to the Parent Company in January
           1997.

           Following the report of Arthur Andersen, the SEC, on February 10,
           1997, commenced a private investigation of the Parent Company for the
           purpose of investigating the matters discussed in such report and
           related matters. The SEC's investigation can result in several types
           of civil or administrative sanctions against the Parent Company and
           individuals associated with the Parent Company, including the
           assessment of monetary penalties. Actions taken by the SEC do not
           preclude additional actions by any other federal, civil or criminal
           authorities or by other regulatory organizations or by third parties.

           The SEC's investigation is continuing, and some of the Parent
           Company's present and former officers and directors and others
           associated with the Parent Company have given testimony. However, no
           conclusion of any alleged wrongdoing by the Parent Company or any
           individual has been communicated to the Parent Company by the SEC.

           The Registrant does not believe that the focus of the SEC's
           investigation is upon the Registrant or CCC. CCC is unable to predict
           the outcome of the SEC's ongoing private investigation of the Parent
           Company.

           As reported in the Registrant's Current Report on Form 8-K, filed
           with the SEC on May 21, 1998, the Parent Company reported that its
           Chairman and CEO, Stefan M. Palatin, was suspended from his duties
           pending the investigation of fraud charges against him by Austrian
           government authorities. On June 8, 1998, the Parent Company's Board
           of Directors removed Mr. Palatin as Managing Director and Chief
           Executive Officer. Mr. Palatin resigned from the Board of Directors
           of the Parent Company on July 6, 1998. Mr. Rudolf J. Weissenberger
           has been appointed to replace Mr. Palatin as an executive director
           and Chief Executive Officer. Also, on June 8, 1998, the Board
           approved a proposal to add two independent directors to the Board.
           The Board engaged legal counsel to provide legal advice and commence
           legal action, if appropriate, against former officers or directors of
           the Parent Company (including Mr. Palatin) if it is determined that
           they engaged in any misfeasance or improper self-dealing.

           Mr. Palatin had been a director of CCC; he resigned from his position
           as director on April 23, 1998.

           CCC further understands that Austrian authorities have initiated
           investigations of persons in addition to Mr. Palatin, including Mr.
           Weissenberger and Dr. Axel Friedberg. The investigations which remain
           pending have not resulted in any action being taken against Mr.
           Weissenberger, and he has informed the Parent Company that he


                                       13
<PAGE>   14
           does not believe that there is any basis for any action to be taken
           against him. Dr. Friedberg has been a non-executive director of the
           Parent Company since 1997. In August 1998, charges were presented
           against Dr. Friedberg. Dr. Friedberg has denied any wrongdoing and,
           on September 14, 1998, filed objections to the charges against him.

Item 3.    Defaults Upon Senior Securities

           See Item 5. Other Information.


Item 5.    Other Information

           In 1993, the Parent Company negotiated a credit facility
           (hereinafter, the "Credit Facility") with several banks for the use
           of the Parent Company and its affiliates, including CCC. At December
           31, 1996, approximately $73,500,000 in principal indebtedness was
           outstanding under the Credit Facility. As a party to the Credit
           Facility, CCC is jointly and severally liable for the repayment of
           all principal and interest owed under the Credit Facility. The
           obligations of CCC, and the five other subsidiaries of the Parent
           Company that are borrowers under the Credit Facility, are guaranteed
           by the Parent Company.

           Following negotiations in 1997 with the banks providing the Credit
           Facility, an Amended and Restated Credit Agreement was executed in
           June 1997, subject to various actions being taken by the Parent
           Company and its subsidiaries, primarily relating to the provision of
           additional collateral. This Agreement was further amended in July
           1997 and the provisions of the Agreement and its Amendment converted
           the facility to a term loan, payable in installments, with a final
           maturity date of May 31, 1998. The terms of the Agreement and its
           Amendment also provided for additional security over shares in the
           subsidiary of the Parent Company that owns the head office of the
           Parent Company's container leasing operations. They also provided for
           the loans to the former Chairman of $5,900,000 and $3,700,000 to be
           restructured as obligations of the former Chairman to another
           subsidiary of the Parent Company (not CCC), together with the pledge
           to this subsidiary company of 2,030,303 Common Shares beneficially
           owned by him in the Parent Company as security for these loans. They
           further provided for the assignment of these loans to the lending
           banks, together with the pledge of 1,000,000 shares and the
           assignment of the rights of the Parent Company in respect of the
           other 1,030,303 shares. Additionally, CCC granted the lending banks a
           security interest in the fees to which it is entitled for the
           services it renders to the container leasing partnerships of which it
           acts as general partner, including its fee income payable by the
           Registrant. The Parent Company did not repay the Credit Facility at
           the amended maturity date of May 31, 1998.

           On June 30, 1998, the Parent Company entered into a third amendment
           (the "Third Amendment") to the Credit Facility. The Third Amendment
           became effective as of that date, subject to the satisfaction
           thereafter of various conditions, including: the Parent Company must
           deliver its audited financial statements for 1997 by a specified date
           and; on or prior to July 30, 1998, the Parent Company must furnish
           proof that any defaults under any other indebtedness have been waived
           and must also furnish various legal opinions, officers' certificates
           and other loan documentation. All of these conditions were fulfilled
           by August 14, 1998. Under the Third Amendment, the remaining
           principal amount of $36,800,000 will be amortized in varying monthly
           amounts commencing on July 31, 1998 with $26,950,000 due on September
           30, 1998 and a final maturity date of January 8, 1999. The Parent
           Company did not repay the amount due on September 30, 1998. The
           directors of the Parent Company currently are holding discussions
           with the lenders to refinance or extend its debt that became due on
           September 30, 1998.

           The directors of the Parent Company also are pursuing alternative
           sources of financing to meet the amended repayment obligations under
           the Third Amendment. Failure to meet revised lending terms would
           constitute an event of default with the lenders. The declaration of
           an event of default would result in further defaults with other
           lenders under loan agreement cross-default provisions. Should a
           default of the term loans be enforced, the Parent Company and CCC may
           be unable to continue as going concerns.


                                       14
<PAGE>   15
           CCC is currently in discussions with the management of the Parent
           Company to provide assurance that the management of the container
           leasing partnerships managed by CCC, including the Registrant, is not
           disrupted pending a refinancing or reorganization of the indebtedness
           of the Parent Company and its affiliates.

           The Registrant is not a borrower under the Credit Facility, and
           neither the containers nor the other assets of the Registrant have
           been pledged as collateral under the Credit Facility.

           CCC is unable to determine the impact, if any, these concerns may
           have on the future operating results and financial condition of the
           Registrant or CCC and the Leasing Company's ability to manage the
           Registrant's fleet in subsequent periods.


                                       15
<PAGE>   16
Item 6.   Exhibits and Reports on Form 8-K

(a)    Exhibits

<TABLE>
<CAPTION>
        Exhibit
          No.                               Description                                            Method of Filing
        -------                             -----------                                            ----------------
<S>                 <C>                                                                        <C>

          3(a)      Limited Partnership Agreement of the Registrant,  amended and restated     *
                    as of December 28, 1995

          3(b)      Certificate of Limited Partnership of the Registrant                       **

          10        Form of Leasing Agent Agreement with Cronos Containers Limited             ***

          27        Financial Data Schedule                                                    Filed with this document
</TABLE>


(b)    Reports on Form 8-K

       No reports on Form 8-K were filed by the Registrant during the quarter
       ended September 30, 1998.






---------

*      Incorporated by reference to Exhibit "A" to the Prospectus of the
       Registrant dated December 28, 1995, included as part of Registration
       Statement on Form S-1 (No. 33-98290)

**     Incorporated by reference to Exhibit 3.2 to the Registration Statement on
       Form S-1 (No. 33-98290)

***    Incorporated by reference to Exhibit 10.2 to the Registration Statement
       on Form S-1 (No. 33-98290)


                                       16
<PAGE>   17
                                   SIGNATURES



       Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this Report to be signed on its behalf by the
undersigned thereunto duly authorized.




                                   CRONOS GLOBAL INCOME FUND XVI, L.P.


                                   By   Cronos Capital Corp.
                                        The General Partner




                                   By   /s/ Dennis J. Tietz
                                        ----------------------------------------
                                        Dennis J. Tietz
                                        President and Director of Cronos Capital
                                        Corp. ("CCC")
                                        Principal Executive Officer of CCC




Date: November 13, 1998


                                       17
<PAGE>   18
                                  EXHIBIT INDEX


<TABLE>
<CAPTION>
        Exhibit
          No.                               Description                                            Method of Filing
        -------                             -----------                                            ----------------
<S>                 <C>                                                                        <C>

          3(a)      Limited Partnership Agreement of the Registrant,  amended and restated     *
                    as of December 28, 1995

          3(b)      Certificate of Limited Partnership of the Registrant                       **

          10        Form of Leasing Agent Agreement with Cronos Containers Limited             ***

          27        Financial Data Schedule                                                    Filed with this document
</TABLE>







------------------

*      Incorporated by reference to Exhibit "A" to the Prospectus of the
       Registrant dated December 28, 1995, included as part of Registration
       Statement on Form S-1 (No. 33-98290)

**     Incorporated by reference to Exhibit 3.2 to the Registration Statement on
       Form S-1 (No. 33-98290)

***    Incorporated by reference to Exhibit 10.2 to the Registration Statement
       on Form S-1 (No. 33-98290)