SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                   FORM 10-QSB





             QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
                         SECURITIES EXCHANGE ACT OF 1934

                        For the period ended May 31, 1998

                         Commission File Number 0-27944


                          PRIDE AUTOMOTIVE GROUP, INC.
             (Exact name of registrant as specified in its charter)

Delaware                                     98-0157860
(State or other jurisdiction of             (I.R.S. Employer Identification No.)
incorporation or organization)


    Pride House, Watford Metro Centre, Tolpits Lane, Watford, England WD1 8SB
               (Address of principal executive offices) (Zip Code)

                                 (800) 698-6590
                (Issuer's telephone number, including area code)

     Indicate by (X) whether 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 and (2) has been subject to such filing requirements for the
past 90 days. YES X NO

     Common Stock,  $.001 par value.  2,822,500 shares outstanding as of May 31,
1998.


<PAGE>
                  PRIDE AUTOMOTIVE GROUP, INC. AND SUBSIDIARIES


                                      INDEX

<TABLE>
<CAPTION>


                                                                                     Page(s)

PART I. Financial Information:
ITEM 1. Financial Statements
<S>                                                                                  <C>
     Consolidated  Condensed  Balance  Sheets  - May 31,  1998  (Unaudited)  and
November 30, 1997                                                                    3.

     Consolidated  Condensed Statements of Operations  (Unaudited) Six and Three
Months Ended May 31, 1998 and 1997                                                   4.

     Consolidated   Condensed   Statements   of   Comprehensive   Income  (Loss)
(Unaudited) - Six and Three Months Ended May 31, 1998 and 1997 5.

     Consolidated  Condensed  Statements  of Cash Flows  (Unaudited)  Six Months
Ended May 31, 1998 and 1997                                                          6.

     Notes to Interim Consolidated Condensed Financial Statements (Unaudited)        7.

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


     PART II. Other Information                                                      13.


     SIGNATURES                                                                      14.


     EXHIBITS: Exhibit 27 - Financial Data Schedule                                  15.

</TABLE>

<PAGE>
PART 1.  Financial Information
ITEM 1.  Financial Statements

                  PRIDE AUTOMOTIVE GROUP, INC. AND SUBSIDIARIES
                      CONSOLIDATED CONDENSED BALANCE SHEETS

                                   - ASSETS -
<TABLE>
<CAPTION>

                                                                                                        May 31,         November 30,
                                                                                                        1998            1997
                                                                                                        (unaudited)

ASSETS:
<S>                                                                                                     <C>             <C>
 Cash and cash equivalents ..........................................................................   $      6,174    $     77,354
 Accounts receivable ................................................................................      2,243,787       2,002,365
 Inventories ........................................................................................         25,279       1,248,360
 Property, revenue producing vehicles and equipment - net (Note 2) ..................................     25,452,111      27,882,350
 Intangible assets - net (Note 3) ...................................................................      8,759,507       9,090,156
 Investment in affiliate (Note 1) ...................................................................      4,048,460            --
                                                                                                        ------------    ------------

TOTAL ASSETS                                                                                             $40,535,318    $ 40,300,585
                                                                                                        ============    ============

                    - LIABILITIES AND SHAREHOLDERS' EQUITY -

LIABILITIES  (Note 4):
 Bank overdraft line of credit ......................................................................   $  5,689,202    $  6,976,699
 Accounts payable ...................................................................................        849,316       1,758,764
 Accrued liabilities and expenses ...................................................................        685,287         865,977
 Bank debt ..........................................................................................        659,509         695,782
 Obligations under hire purchase contracts ..........................................................     18,171,265      18,341,778
 Other loans ........................................................................................      1,686,000       4,198,500
 Other liabilities ..................................................................................        349,605          52,707
                                                                                                        ------------    ------------

TOTAL LIABILITIES ...................................................................................     28,090,184      32,890,207
                                                                                                        ------------    ------------

COMMITMENTS AND CONTINGENCIES

SHAREHOLDERS' EQUITY:
 Preferred stock, $.01 par value, 2,000,000 shares authorized,
      none issued or outstanding                                                                                  --             --
 Common stock, $.001 par value, 10,000,000 shares authorized;
     2,822,500 shares issued and outstanding at 1998 and 1997,
     respectively                                                                                              2,823           2,823
 Additional paid-in capital .........................................................................     14,122,165      13,582,795
 Deferred financing costs ...........................................................................       (124,100)      (141,500)
 Retained earnings (deficit) ........................................................................     (2,508,905)    (5,857,987)
 Accumulated other comprehensive income (loss) ......................................................        953,151       (175,753)
                                                                                                        ------------    ------------

TOTAL SHAREHOLDERS' EQUITY ..........................................................................     12,445,134       7,410,378
                                                                                                        ------------    ------------

TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY  ..............................................               $40,535,318     $40,300,585
                                                                                                        ============    ============
</TABLE>

        See notes to interim consolidated condensed financial statements

                                     Page 3.

<PAGE>
                  PRIDE AUTOMOTIVE GROUP, INC. AND SUBSIDIARIES
                 CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS
                                   (Unaudited)

<TABLE>
<CAPTION>

                                                            For the Six Months           For the Three Months
                                                                Ended May 31,                Ended May 31,
                                                       --------------------------------- ----------------------
                                                           1998           1997          1998             1997
                                                       -----------    ----------     --------------  ----------

REVENUE:
<S>                                                    <C>            <C>            <C>            <C>       
Contract hire income                                   $ 4,901,660    $3,525,059     $2,459,795     $1,872,575
Sale of contract hire vehicles                           1,604,359     3,716,495        787,247      1,984,679
Sale of vehicles - AC Cars (Note 1)                      -               516,506       -               313,943
Fleet management and other income - contract hire        554,455         409,828        232,461        303,408
Other income - AC Cars                                   -                87,714       -                45,714
                                                         ---------     ----------     ---------      ---------
                                                         7,060,474     8,255,602      3,479,503      4,520,319
                                                         ---------     ----------     ---------      ---------

EXPENSES:
Cost of sales - contract hire                            2,922,537     4,295,023      1,441,950      2,268,866
Cost of sales - AC Cars                                  -               441,972       -               269,794
Depreciation - contract hire                             2,252,844     1,664,894      1,180,888        847,840
Depreciation - AC Cars                                   -               218,558       -               109,289
General and administrative expenses - contract hire        881,711       739,996        392,125        363,969
General and administrative expenses - AC Cars            -               776,457       -               397,342
Amortization of intangible assets - contract hire          315,360       315,360        157,680        157,680
Amortization of intangible assets - AC Cars              -                 1,232       -                   616
Interest expenses and other - contract hire              1,101,730       624,310        525,921        344,999
Interest expenses and other - AC Cars                    -               185,964       -               107,582
Research and development costs - AC Cars                 -               313,922       -               232,010
                                                         ---------     ---------      ---------      ---------
                                                         7,474,182     9,577,688      3,698,564      5,099,987
                                                         ---------     ---------      ---------      ---------

LOSS BEFORE MINORITY INTERESTS                            (413,708)   (1,322,086)      (219,061)      (579,668)


Minority interests in net loss of consolidated
subsidiaries                                             -               400,166       -               227,093
                                                         ---------     ---------      ---------     ----------

LOSS BEFORE PROVISION FOR INCOME
 TAXES                                                    (413,708)     (921,920)      (219,061)      (352,575)

Provision (credit) for income taxes                      -                 -           -                 -
                                                         ---------     ---------      ---------     -----------

NET LOSS                                                 $ (413,708)  $ (921,920)    $ (219,061)    $ (352,575)
                                                         ===========  ===========    ===========    ===========


LOSS PER COMMON SHARE (Note 5a):
Net loss before minority interest                        $(.15)       $(.47)         $(.08)         $(.20)
Minority interest in net loss of subsidiary              -              .14            -              .08
                                                         -----------  ----------     -----------    -----------
                                                         $(.15)       $(.33)         $(.08)         $(.12)
                                                         ===========  ==========     ===========    ===========

WEIGHTED AVERAGE NUMBER OF COMMON
SHARES OUTSTANDING (Note 5a)                               2,822,500   2,790,016       2,822,500      2,820,866
                                                         ===========  ==========     ===========    ===========

</TABLE>

        See notes to interim consolidated condensed financial statements

                                     Page 4.
<PAGE>
                  PRIDE AUTOMOTIVE GROUP, INC. AND SUBSIDIARIES
        CONSOLIDATED CONDENSED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
                                   (Unaudited)

<TABLE>
<CAPTION>

                                                                              For the Six Months            For the Three Months
                                                                                   Ended May 31,                Ended May 31,
                                                                           --------------------------------- -----------------------
                                                                            1998           1997           1998             1997
                                                                           ------------    ------------   ------------  ------------

<S>                                                                         <C>            <C>            <C>           <C>        
NET LOSS                                                                    $(413,708)     $  (921,920)   $  (219,061)  $ (352,575)

OTHER COMPREHENSIVE INCOME (Note 5b):
  Foreign currency translation adjustments                                    452,243         (388,852)       343,676     (665,182)
                                                                            -----------    -----------    -----------   -----------

COMPREHENSIVE INCOME (LOSS)                                                 $    38,535    $(1,310,772)   $   124,615   $(1,017,757)
                                                                            ===========    ===========    ===========   ===========
</TABLE>







































        See notes to interim consolidated condensed financial statements

                                     Page 5.

<PAGE>
                  PRIDE AUTOMOTIVE GROUP, INC. AND SUBSIDIARIES
                 CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS
                                   (Unaudited)
<TABLE>
<CAPTION>

          
                                                                                                    For the Six Months Ended
                                                                                                              May 31,     
                                                                                                     1998       1997
                                                                                                    ----------  ---------     

CASH FLOWS FROM OPERATING ACTIVITIES:
<S>                                                                                                 <C>         <C>        
Net loss ........................................................................................   $ (413,708) $ (921,920)
Adjustments to reconcile net loss to net cash provided
by operating activities:
Minority interest in net loss of subsidiary .....................................................   -             (400,166)
Depreciation and amortization ...................................................................    2,252,844   1,904,595
Amortization of goodwill ........................................................................      315,360     295,449
Loss (gain) on disposal of fixed assets .........................................................      128,795    (168,710) 
Deferred financing costs ........................................................................       17,400          -
Changes in assets and liabilities:
(Increase) decrease in accounts receivable ......................................................     (292,212)    341,221
Decrease (increase) in inventories ..............................................................      107,090    (609,131) 
(Decrease) increase in accounts payable, accrued expenses and other liabilities                       (190,552)    850,217
Net cash provided from operating activities .....................................................    1,925,017   1,291,555

CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of revenue producing assets ............................................................   (5,492,212) (6,781,178)   
Proceeds from sale of fixed assets ..............................................................    2,147,269   1,030,421

Net cash (utilized) by investing activities .....................................................   (3,344,943) (5,750,757)


CASH FLOWS FROM FINANCING ACTIVITIES:
Net proceeds from bank lines of credit ..........................................................      391,515   2,323,570
Proceeds from sale of common stock and warrants .................................................   -               92,500
Costs associated with stock/debt offerings ......................................................   -             (126,296)
Principal payments of long-term debt ............................................................      (36,273)     (7,290) 
Payment of other debt ...........................................................................   -             (824,600)
Proceeds from hire purchase contract funding ....................................................    5,255,114   9,079,975
Principal repayments of hire purchase contract funding ..........................................   (4,713,853) (5,927,829) 

Net cash provided by financing activities .......................................................      896,503   4,610,030

EFFECT OF EXCHANGE RATE CHANGES ON CASH .........................................................      452,243    (388,852) 

NET (DECREASE) IN CASH AND CASH EQUIVALENTS .....................................................      (71,180)   (238,024) 

Cash and cash equivalents, beginning of year ....................................................       77,354     250,699

CASH AND CASH EQUIVALENTS, END OF PERIOD ........................................................      $ 6,174    $ 12,675

</TABLE>






        See notes to interim consolidated condensed financial statements

                                     Page 6.

<PAGE>
                  PRIDE AUTOMOTIVE GROUP, INC. AND SUBSIDIARIES
          NOTES TO INTERIM CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
                                   (Unaudited)



NOTE   1  - DESCRIPTION OF COMPANY:

                Pride Automotive Group, Inc. (the "Company") was incorporated in
                the State of Delaware  in March 1995.  Pursuant to the terms and
                conditions of a reorganization in March 1995, the Company issued
                1,500,000  shares of its common stock to Pride,  Inc. (an entity
                incorporated  in the  State of  Delaware),  thereby  making  the
                Company a majority owned subsidiary of Pride,  Inc., in exchange
                for all of the issued and outstanding shares held by Pride, Inc.
                of Pride Management  Services,  Plc., (PMS) a consolidated group
                of operating  companies  located in the United Kingdom.  The PMS
                companies are engaged in the leasing of motor vehicles primarily
                on  contract  hire to local  authorities  and  select  corporate
                customers throughout the United Kingdom.  This exchange of stock
                resulted  in PMS  becoming  a  wholly  owned  subsidiary  of the
                Company. The Company, its subsidiary PMS, and PMS's subsidiaries
                are referred to as the  "Company"  unless the context  otherwise
                requires.

                On  November  29,  1996,  the  Company,  through a newly  formed
                majority  owned  subsidiary,  AC Automotive  Group Inc., and its
                wholly-owned  subsidiary AC Car Group Limited (registered in the
                United Kingdom),  completed the acquisition of certain assets of
                AC Cars Limited and Autocraft Limited.  These two companies were
                engaged in the  manufacture  and sale of specialty  automobiles.
                The purchase price of approximately $6,067,000 was financed with
                the proceeds of a private offering of the Company's common stock
                and by loans.

                On February  12, 1998,  the Board of Directors of AC  Automotive
                Group,  Inc.  authorized the issuance of 6,130,000 shares of its
                common stock to Erwood Holdings, Inc., a company affiliated with
                Alan  Lubinsky,  the President and Chief  Executive  Officer and
                director of the  Company  and AC  Automotive  Group,  Inc.,  for
                aggregate  consideration of $6,130. In addition,  441,300 shares
                were   issued  to  other   unrelated   parties   for   aggregate
                consideration  of $443.  The  foregoing  issuance  of shares has
                reduced  the  ownership  of AC  Automotive  Group,  Inc.  by the
                Company to approximately 16%.

                Accordingly,  the Company's  investment in AC Automotive  Group,
                Inc., is being reported under the cost method of accounting.

                The accounting policies followed by the Company are set forth in
                Note  2  to  the  Company's  consolidated  financial  statements
                included in its Annual  Report on Form 10-KSB for the year ended
                November 30, 1997,  which is  incorporated  herein by reference.
                Specific  reference is made to this report for a description  of
                the Company's securities and the notes to consolidated financial
                statements included therein.


                                    Page 7.

<PAGE>
                  PRIDE AUTOMOTIVE GROUP, INC. AND SUBSIDIARIES
          NOTES TO INTERIM CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
                                   (Unaudited)



NOTE   1  - DESCRIPTION OF COMPANY (Continued):

                In the opinion of management, the accompanying unaudited interim
                consolidated  condensed financial statements of Pride Automotive
                Group,  Inc.  and its wholly  owned  subsidiaries,  contain  all
                adjustments  necessary to present fairly the Company's financial
                position as of May 31,  1998 and the  results of its  operations
                for the six and three month  periods ended May 31, 1998 and 1997
                and cash flows for the six month  periods ended May 31, 1998 and
                1997.

                The results of  operations  for the six and three month  periods
                ended May 31, 1998 and 1997 are not  necessarily  indicative  of
                the results to be expected for the full year.


NOTE   2  - FIXED ASSETS:

                Fixed assets consists of the following:
<TABLE>
<CAPTION>

                                                                               May 31,               November 30,
                                                                               1998                  1997
                                                                                 (unaudited)

<S>                                                                           <C>                   <C>          
                Building and improvements                                     $     784,599         $     820,160
                Revenue producing vehicles                                       29,889,620            27,612,291
                Furniture, fixtures and machinery                                   577,198             4,670,067
                                                                             --------------        --------------
                                                                                 31,251,417            33,102,518
                Less: accumulated depreciation                                    5,799,306             5,220,168
                                                                              -------------         -------------
                                                                                $25,452,111           $27,882,350
                                                                                ===========           ===========
</TABLE>


NOTE   3   - INTANGIBLE ASSETS:

                Intangible  assets consist of goodwill which arose in connection
                with the acquisition of certain subsidiaries of PMS. Goodwill is
                being   amortized   over  a  period  of  10  -  20  years  on  a
                straight-line basis. Accumulated amortization as of May 31, 1998
                and  November 30, 1997  aggregated  $3,938,193  and  $3,622,833,
                respectively.

                The Company  periodically reviews the valuation and amortization
                of goodwill  to  determine  possible  impairment  by  evaluating
                events and  circumstances  that might  indicate an  inability to
                recover the carrying amount. Such evaluation is based on various
                analyses,  including  profitability  projections  and cash flows
                that incorporate the impact on existing Company business.


                                     Page 8.

<PAGE>
                  PRIDE AUTOMOTIVE GROUP, INC. AND SUBSIDIARIES
          NOTES TO INTERIM CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
                                   (Unaudited)



NOTE   4   - LIABILITIES:

                Included in  liabilities  as of May 31, 1998, are amounts in the
                aggregate  of  $10,402,038  which are not due and payable  until
                after May 31, 1999. This amount consists of amounts due to trade
                creditors, loans payable and equipment notes payable.


NOTE   5   -    NEW ACCOUNTING PRONOUNCEMENTS:

                (a)  Earnings (Loss) per Share:

                The Company has adopted  SFAS 128  "Earnings  Per Share"  ("SFAS
                128"),  which is effective for periods ending after December 15,
                1997 and has changed the method of calculating  earnings  (loss)
                per share.  SFAS 128  requires the  presentation  of "basic" and
                "diluted"  earnings  (loss)  per share on the face of the income
                statement.  Prior period earnings (loss) per share data has been
                restated in  accordance  with SFAS 128. Loss per common share is
                computed by dividing the net loss by the weighted average number
                of common shares outstanding during each period.


                (b) Statement of Comprehensive Income:

                The  Company  has  adopted  SFAS  130  "Reporting  Comprehensive
                Income",  which is effective for years  beginning after December
                15, 1997 and early adoption is permitted.  Comprehensive  income
                consists  of net income or loss and other  comprehensive  income
                (income,  expenses,  gains and  losses  that  bypass  the income
                statement and are reported  directly as a separate  component of
                equity).


NOTE 6  -       PUBLIC OFFERING:

                The  Company  has  filed a Form  SB-2  with the  Securities  and
                Exchange  Commission,  registering  for the  sale  of  1,250,000
                shares of common stock, which includes 170,000 shares being sold
                by certain selling shareholders. The estimated net proceeds from
                this offering, to the Company, is expected to be $3,488,000. The
                Company intends to use these proceeds to repay existing debt.



                                    Page 9.

<PAGE>
ITEM  2.        MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
                CONDITION AND RESULTS OF OPERATIONS

                Pride Automotive  Group,  Inc., (the "Company") was incorporated
                in the State of Delaware  in March  1995.  Pursuant to the terms
                and  conditions of a  reorganization  agreement  entered into in
                March 1995,  the Company issued  1,500,000  shares of its common
                stock to Pride,  Inc.  (an entity  incorporated  in the State of
                Delaware), in exchange for all the issued and outstanding shares
                of PMS,  thereby making the Company a majority owned  subsidiary
                of Pride and PMS a wholly-owned  subsidiary of the Company.  PMS
                is the  holding  company  for  nine  wholly-owned  subsidiaries,
                operating as one unit,  located in the United  Kingdom.  PMS and
                its wholly-owned  subsidiaries are located in the United Kingdom
                and  follow  generally  accepted  accounting  principles  in the
                United  Kingdom.  For  purposes  of the  consolidated  financial
                statements of the Company, the statements have been converted to
                the  generally  accepted  accounting  principles  in the  United
                States.

                    Pride,  the Company's  parent,  is an entity reporting under
               the Exchange Act, and its reports may be obtained and reviewed by
               either  contacting  the Company or the  Securities  and  Exchange
               Commission.  Pride,  Inc. on its own has virtually no operations.
               As such, its financial  viability is represented by the financial
               statements of the Company. Pride was incorporated as L.H.M. Corp.
               in the  State of  Delaware  on May 10,  1988 as a  "blank  check"
               company,  for the purpose of seeking potential  business ventures
               through  acquisitions  or merger.  In April  1990,  L.H.M.  Corp.
               entered  into  an  Agreement  and  Plan  of  Reorganization  with
               International  Sportsfest,  Inc.  ("ISI"),  a  company  formed to
               engage in and establish sports  expositions in sports merchandise
               such as clothing and equipment. ISI never engaged in any business
               operations.  In January  1994,  ISI entered into an Agreement and
               Plan of  Reorganization  with PMS,  whereby  PMS became a wholly-
               owned subsidiary of ISI and ISI changed its name to Pride, Inc.

                In December  1995, the Company  consummated a private  placement
                offering  of  common  stock of  500,000  shares,  which  reduced
                Pride's ownership  interest to 72.8%. In April 1996, the Company
                completed an initial public offering of 592,500 shares of common
                stock at $5.00 per share and 2,000,000  redeemable  common stock
                warrants at a price of $.10 each. The effect of the offering was
                to reduce Pride's ownership interest to 56.55%.

                On  November  29,  1996,  the  Company,  through a newly  formed
                majority  owned  subsidiary,  AC Automotive  Group Inc., and its
                wholly-owned  subsidiary AC Car Group Limited (registered in the
                United Kingdom),  completed the acquisition of certain assets of
                AC Cars Limited and Autocraft Limited.  These two companies were
                engaged in the manufacture  and sale of speciality  automobiles.
                The purchase price of approximately $6,067,000 was financed with
                the proceeds of a private offering of the Company's common stock
                and by loans.

                On February  12, 1998,  the Board of Directors of AC  Automotive
                Group,  Inc.  authorized the issuance of 6,130,000 shares of its
                common stock to Erwood Holdings, Inc., a company affiliated with
                Alan  Lubinsky,  the President and Chief  Executive  Officer and
                director of the  Company  and AC  Automotive  Group,  Inc.,  for
                aggregate  consideration of $6,130. In addition,  441,300 shares
                were   issued  to  other   unrelated   parties   for   aggregate
                consideration  of $443.  The  foregoing  issuance  of shares has
                reduced  the  ownership  of AC  Automotive  Group,  Inc.  by the
                Company to approximately 16%.


                                    Page 10.

<PAGE>
                Accordingly,  the Company's  investment in AC Automotive  Group,
                Inc., is being reported under the cost method of accounting.

                The  financial   information   presented  herein  include:   (i)
                Consolidated  Condensed  Balance  Sheets as of May 31,  1998 and
                November 30, 1997;  (ii)  Consolidated  Condensed  Statements of
                Operations  for the Six and Three  Month  Periods  Ended May 31,
                1998  and  1997  (iii)  Consolidated   Condensed  Statements  of
                Comprehensive  Income  (Loss)for the Six and Three Month Periods
                Ended  May 31,  1998 and 1997  and (iv)  Consolidated  Condensed
                Statements of Cash Flows for the Six Month Periods Ended May 31,
                1998 and 1997.

                Results of Operations - Contract Hire

                For the six-month  period ended May 31, 1998,  contract hire and
                fleet management  revenue increased by $1,521,228 or 38.7%, when
                compared to the same period in 1997.

                During this period,  163 new leasing  contracts  were written as
                against 245 for the same period  during 1997.  For the six month
                period 94 vehicles were disposed of on  termination of contracts
                as against 60 vehicles disposed during the same period in 1997.

                Contract hire income  increased by $516,273  when  comparing the
                three-month  period ended May 31, 1998 to the three months ended
                May 31,  1997.  This 23.7%  increase is due to the net growth in
                the fleet of 281 vehicles over the past year.

                Leased vehicle sales  decreased by $1,197,432 when comparing the
                two quarters due to less contracts  terminating  and accordingly
                less sales of vehicles.

                During the quarter,  67 new  contracts  were acquired as against
                128 in the  previous  year.  The average  monthly  rental of new
                contracts  written was $667 as against  $608 per vehicle  during
                the same quarter in 1997.

                During the quarter,  57 vehicles were disposed on termination of
                contracts at an average profit of $1,249 per vehicle. During the
                same quarter in 1997, 20 vehicles were disposed of at an average
                profit of $3,275 per vehicle.  The average profit per vehicle on
                disposal is  dependent  on the type of vehicle  sold and current
                market value of vehicles.

                Costs of sales  relating to sales of leased  vehicles  decreased
                from  $3,415,975  to  $1,506,008  when  comparing the six months
                ended May 31, 1998 with the six months ended May 31, 1997. Costs
                of sales  relating to sales of leased  vehicles  decreased  from
                $1,703,318 to $716,054 when  comparing the quarter ended May 31,
                1998 with the quarter  ended May 31, 1997.  This decrease is due
                to a decrease  in the sales of  vehicles  at low margins to take
                advantage of dealer bonuses.

                For the  six-month  period ended May 31, 1998 and 1997,  cost of
                sales,  including  depreciation,  relating to contract  hire and
                fleet management income increased from $2,543,942 to $3,669,273,
                an  increase  of  $1,125,431or  44.2%  which is in line with the
                increase in contract hire and fleet management  income of 38.7%.
                Cost of sales, including depreciation, increased from $1,413,388
                to $1,906,784,  an increase of $493,396 or 34.9%, when comparing
                the  quarters  ended May 31, 1998 and 1997,  respectively.  This
                increase is in line with the  increase in contract  hire revenue
                of 31.3%.

                Cost of sales as a percent of contract hire and fleet management
                revenue  increased  from 64.6% to 67.2% for the six months ended
                May 31, 1998 and 1997,  respectively.  This increase is due to a
                reduction  in  margin as a result  of more  competitive  trading
                conditions  in the  industry.  For the three month periods ended
                May 31, 1998 and 1997,  this percentage has increased from 64.9%
                to 70.8%.

                                    Page 11.

<PAGE>
                For the six months  ended May 31,  1998 and 1997,  respectively,
                general and  administrative  expenses  increased  by $141,715 or
                19%,  which is in line with the  increase in revenues and normal
                increases in overhead and business operating costs.  General and
                administrative  expenses  increased  marginally  by $28,157 when
                comparing   the   quarters   ended   May  31,   1998  and  1997,
                respectively.

                For the six months  ended May 31,  1998 and 1997,  respectively,
                interest  expense   increased  by  $477,420.   Interest  expense
                increased by $180,922  when  comparing  the three month  periods
                ended May 31, 1998 and 1997, respectively. This increase is as a
                result of the increase in hire  purchase  funding to finance new
                business  and the  increase  in the bank line of credit over the
                past year to fund increased working capital requirements.

                For the six  months  ended May 31,  1998 and 1997,  the  Company
                reported,  after  amortization  of goodwill  ($315,360  for both
                periods) a (loss) profit of $413,708 and $11,799,  respectively,
                for the contract hire operations. For the three months ended May
                31, 1998 and 1997, the Company reported,  after  amortization of
                goodwill ($157,680 for both periods) a (loss) profit of $219,061
                and $177,318, respectively, for the contract hire operations.



                Liquidity and Capital Resources

                Net cash provided from  operating  activities  for the six month
                periods ended May 31, 1998 and 1997  aggregated  $1,925,017  and
                $1,291,555,  respectively.  The  Company  utilized  net cash for
                investing  activities  (for the  purchase  of revenue  producing
                assets) of $3,344,943  and  $5,750,757 for the six month periods
                ended May 31,  1998 and 1997,  respectively.  Net cash  provided
                through financing activities  aggregated $896,503 and $4,610,030
                for  the  six  month  periods  ended  May  31,  1998  and  1997,
                respectively.

                The Company  believes  that its financial  resources  from funds
                provided from  operations and its funding lines will be adequate
                to meet its requirements for the next twelve-month period.

                The  Company  has  filed a Form  SB-2  with the  Securities  and
                Exchange  Commission,  registering  for the  sale  of  1,250,000
                shares of common stock, which includes 170,000 shares being sold
                by certain selling shareholders. The estimated net proceeds from
                this offering, to the Company, is expected to be $3,488,000. The
                Company intends to use these proceeds to repay existing debt.



                                    Page 12.

<PAGE>
PART II.        OTHER INFORMATION
ITEM 1 -  Legal Proceedings.

          None.

ITEM 2 -  Changes in Securities.
          
          None.

ITEM 3 -  Defaults Upon Senior Securities.
          
          None.

ITEM 4 -  Submission of Matters to a Vote of Security Holders.

          None.

ITEM 5 -  Other Information.

          None.

ITEM 6 -  Exhibits or Reports on Form 8-K.

          Exhibit 27 - Financial Data Schedule.

                                    Page 13.

<PAGE>
                                   SIGNATURES

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



Dated:    July 13, 1998                            PRIDE AUTOMOTIVE GROUP, INC.



                                                    By: /s/ Alan Lubinsky
                                                        Chief Executive Officer
                                                        
















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