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 August 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 August
31, 1998.


<PAGE>
                  PRIDE AUTOMOTIVE GROUP, INC. AND SUBSIDIARIES
<TABLE>
<CAPTION>


                                                                                   INDEX



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

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

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

     Consolidated  Condensed  Statements of Cash Flows  (Unaudited)  Nine Months
Ended August 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>

                                                                                                          August 31,    November 30,
                                                                                                             1998            1997
                                                                                                        (unaudited)

ASSETS:
<S>                                                                                                     <C>             <C>         
 Cash and cash equivalents ..........................................................................   $     15,848    $     77,354
 Accounts receivable ................................................................................      2,317,652       2,002,365
 Inventories ........................................................................................           --         1,248,360
 Property, revenue producing vehicles and equipment - net (Note 2) ..................................     23,781,513      27,882,350
 Intangible assets - net (Note 3) ...................................................................      8,601,828       9,090,156
 Investment in affiliate (Note 1) ...................................................................      4,048,460            --
                                                                                                        ------------    ------------

TOTAL ASSETS ........................................................................................   $ 38,765,301    $ 40,300,585
                                                                                                        ============    ============
                    - LIABILITIES AND SHAREHOLDERS' EQUITY -

LIABILITIES  (Note 4):
 Bank overdraft line of credit ......................................................................   $  6,186,168    $  6,976,699
 Accounts payable ...................................................................................        705,850       1,758,764
 Accrued liabilities and expenses ...................................................................        858,299         865,977
 Bank debt ..........................................................................................        694,501         695,782
 Obligations under hire purchase contracts ..........................................................     16,966,515      18,341,778
 Other loans ........................................................................................      1,686,000       4,198,500
 Other liabilities ..................................................................................        565,452          52,707
                                                                                                        ------------    ------------

TOTAL LIABILITIES ...................................................................................     27,662,785      32,890,207
                                                                                                        ------------    ------------

COMMITMENTS AND CONTINGENCIES

SHAREHOLDERS' EQUITY (Note 6):
 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 ...........................................................................       (106,350)      (141,500)
 Retained earnings (deficit) ........................................................................     (2,990,123)    (5,857,987)
 Accumulated other comprehensive income (loss) ......................................................         74,001       (175,753)
                                                                                                        ------------    ------------

TOTAL SHAREHOLDERS' EQUITY ..........................................................................     11,102,516       7,410,378
                                                                                                        ------------    ------------

TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY                                                               $38,765,301    $ 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 Nine Months               For the Three Months
                                                      Ended August 31,                Ended August 31,          
                                              --------------------------------  --------------------------------
                                                 1998          1997              1998             1997    
                                              -------------------------------    --------------  --------------

REVENUE:
<S>                                           <C>             <C>             <C>             <C>         
Contract hire income ......................   $  7,344,650    $  5,571,724    $  2,442,990    $  2,046,665
Sale of contract hire vehicles ............      2,733,244       5,343,285       1,128,885       1,626,790
Sale of vehicles - AC Cars (Note 1) .......           --           516,506            --              --
Fleet management and other income -
     contract hire ........................        725,954         660,455         171,499         250,627
Other income - AC Cars - 377,892 - 290,178
                                                                                              ------------
                                                10,803,848      12,469,862       3,743,374       4,214,260
                                              ------------    ------------    ------------    ------------

EXPENSES:
Cost of sales - contract hire .............      4,736,408       6,530,114       1,813,871       2,235,091
Cost of sales - AC Cars ...................           --           492,353            --            50,381
Depreciation - contract hire ..............      3,510,813       2,559,706       1,257,969         894,812
Depreciation - AC Cars ....................           --           329,057            --           110,499
General and administrative expenses -
     contract hire ........................      1,311,961       1,029,518         430,250         289,522
General and administrative expenses -
     AC Cars ..............................           --         1,254,423            --           477,966
Amortization of intangible assets -
     contract hire ........................        473,039         473,040         157,679         157,680
Amortization of intangible assets -
     AC Cars ..............................           --             1,847            --               615
Interest expenses and other -
     contract hire ........................      1,666,553       1,043,702         564,823         419,392
Interest expenses and other - AC Cars .....           --           286,576            --           100,612
Research and development costs - AC Cars ..           --           691,166            --           377,244
                                                                                              ------------
                                                11,698,774      14,691,502       4,224,592       5,113,814
                                              ------------    ------------    ------------    ------------

LOSS BEFORE MINORITY INTERESTS ............       (894,926)     (2,221,640)       (481,218)       (899,554)

Minority interests in net loss of
     consolidated subsidiaries ............           --           485,894            --            85,728
                                                                                              ------------

LOSS BEFORE PROVISION FOR INCOME TAXES ....       (894,926)     (1,735,746)       (481,218)       (813,826)

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

NET LOSS ..................................   $   (894,926)   $ (1,735,746)   $   (481,218)   $   (813,826)
                                              ============    ============    ============    ============


LOSS PER COMMON SHARE (Note 5a):
Net loss before minority interest .........   $       (.32)   $       (.79)   $       (.17)   $       (.32)
Minority interest in net loss of subsidiary           --               .17            --               .03
                                              ------------    ------------    ------------    ------------
                                              $       (.32)   $       (.62)   $       (.17)   $       (.29)
                                              ============    ============    ============    ============

WEIGHTED AVERAGE NUMBER OF COMMON
SHARES OUTSTANDING (Note 5a) ..............      2,822,500       2,805,878       2,822,500       2,837,600
                                              ============    ============    ============    ============

</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 Nine Months               For the Three Months
                                                   Ended August 31,                Ended August 31,          
                                           ----------------------------  --------------------------------
                                              1998           1997             1998             1997    
                                           ---------------------------   --------------    ------------

<S>                                         <C>            <C>            <C>            <C>         
NET LOSS ................................   $  (894,926)   $(1,735,746)   $  (481,218)   $  (813,826)

OTHER COMPREHENSIVE INCOME (Note 5b):
 Foreign currency translation adjustments       429,636       (204,116)       (22,607)       184,736
                                            -----------    -----------    -----------    -----------

COMPREHENSIVE INCOME (LOSS) .............   $  (465,290)   $(1,939,862)   $  (503,825)   $  (629,090)
                                            ===========    ===========    ===========    ===========

</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 Nine Months Ended
                                                                      August 31,
                                                                       1998 1997

CASH FLOWS FROM OPERATING ACTIVITIES:
<S>                                                         <C>         <C>          
Net loss                                                    $ (894,926) $ (1,735,746)
Adjustments to reconcile net loss to net cash provided
by operating activities:
Minority interest in net loss of subsidiary                      -         (485,894)
Depreciation and amortization                                 3,510,813    2,888,753
Amortization of goodwill                                        473,037      474,424
Loss (gain) on disposal of fixed assets                         202,052    (193,752)
Deferred financing costs                                         35,150         -
Changes in assets and liabilities:
(Increase) in accounts receivable                              (366,077)   (13,500)
Decrease (increase) in inventories                              132,369    (669,286)
Increase in accounts payable, accrued expenses 
     and other liabilities                                       54,841    2,099,683
                                                            -------------- --------------
Net cash provided from operating activities                   3,147,259    2,364,682
                                                            ------------ --------------

CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of revenue producing assets                         (6,319,020)  (10,162,619)
Proceeds from sale of fixed assets                            2,813,533     1,443,250
                                                              ------------ --------------
Net cash (utilized) by investing activities                  (3,505,487)   (8,719,369)
                                                             ------------ --------------

CASH FLOWS FROM FINANCING ACTIVITIES:
Net proceeds from bank lines of credit                         888,481      3,008,278
Proceeds from sale of common stock and warrants                      -         92,500
Costs associated with stock/debt offerings                           -       (179,952)
Principal payments of long-term debt                           (1,281)        (53,789)
Payment of other debt                                                -       (823,970)
Proceeds from hire purchase contract funding                6,492,373       14,438,622
Principal repayments of hire purchase contract funding     (7,512,487)     (10,147,407)
                                                            ----------- -------------
Net cash (utilized) provided by financing activities          (132,914)     6,334,282
                                                            ------------- --------------

EFFECT OF EXCHANGE RATE CHANGES ON CASH                        429,636       (204,116)
                                                            ------------ --------------

NET (DECREASE) IN CASH AND CASH EQUIVALENTS                   (61,506)       (224,521)

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

CASH AND CASH EQUIVALENTS, END OF PERIOD                     $ 15,848        $ 26,178
                                                            ============   ==============

</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 group of  companies is 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.

                 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 August  31,  1998 and the
                 results of its  operations for the nine and three month periods
                 ended  August  31,  1998 and 1997 and cash  flows  for the nine
                 month periods ended August 31, 1998 and 1997.


                                     Page 7.

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



NOTE   1   - DESCRIPTION OF COMPANY (Continued):

                 The results of operations  for the nine and three month periods
                 ended August 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>

                                                                               August 31,            November 30,
                                                                               1998                  1997        
                                                                                 (unaudited)

<S>                                                                           <C>                   <C>          
                 Building and improvements                                    $     784,599         $     820,160
                 Revenue producing vehicles                                      28,608,377            27,612,291
                 Furniture, fixtures and machinery                                  577,198             4,670,067
                                                                             --------------        --------------
                                                                                 29,970,174            33,102,518
                 Less: accumulated depreciation                                   6,188,661             5,220,168
                                                                              -------------         -------------
                                                                                $23,781,513           $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 August 31,
                 1998  and  November   30,  1997   aggregated   $4,095,870   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.


NOTE   4   - LIABILITIES:

                 Included in  liabilities  as of August 31, 1998, are amounts in
                 the aggregate of $9,223,729 which are not due and payable until
                 after August 31, 1999.  This amount  consists of amounts due to
                 trade creditors, loans payable and equipment notes payable.


                                     Page 8.

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



NOTE   5   -     NEW ACCOUNTING PRONOUNCEMENTS:

                 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.

                 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 August 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 August 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 August 31, 1998 and
                 November 30, 1997; (ii)  Consolidated  Condensed  Statements of
                 Operations  for the Nine and Three Month  Periods  Ended August
                 31, 1998 and 1997 (iii)  Consolidated  Condensed  Statements of
                 Comprehensive  Income  (Loss)  for the  Nine  and  Three  Month
                 Periods  Ended  August 31, 1998 and 1997 and (iv)  Consolidated
                 Condensed  Statements  of Cash Flows for the Nine Month Periods
                 Ended August 31, 1998 and 1997.

                 Results of Operations - Contract Hire

                         All numbers for the prior year are  exclusive of the AC
                    Automotive Group.

                 For the nine month period ended August 31, 1998,  contract hire
                 and fleet management revenue increased by $1,838,425 or 29.50%,
                 when  compared  with the same period in 1997.  This increase is
                 mainly due to the growth of the fleet,  since the  beginning of
                 1997.

                 During the period,  185 new  contracts  were written as against
                 403 for the same period during 1997. For the nine month period,
                 194 vehicles  were disposed of on  termination  of contracts as
                 against 92 vehicles disposed during the same period in 1997.

                 Contract  hire  income  increased  by  $396,325  or 19.36% when
                 comparing  the three month  period ended August 31, 1998 to the
                 three  months  ended  August 31,  1997.  This  increase is as a
                 result of the growth in the fleet over the past two years.

                 Lease  vehicle sales  decreased by $497,905 when  comparing the
                 two quarters.  Although more contracts terminated than in 1997,
                 the amount of vehicle sales is dependent on the type of vehicle
                 sold and the market value.

                 During the  quarter,  100 vehicles  were  disposed of, 32 at an
                 average  profit of $644 and 66 at an average loss of $335.  The
                 average profit per vehicle on disposal is dependent on the type
                 of  vehicle  sold and the  current  market  value of  vehicles.
                 During the same quarter in 1997,  32 vehicles  were disposed of
                 at an average profit of $1,076.

                 During the quarter,  22 new contracts  were acquired as against
                 158 in the previous  year.  The average  monthly  rental of new
                 contracts  written was $571 as against $582 per vehicle  during
                 the same quarter in 1997.

                 For the three month period ended August 31, 1998, cost of sales
                 including  depreciation decreased marginally from $3,129,903 to
                 $3,071,840.  As a percent of  contract  hire income and sale of
                 vehicles,  this percentage  increased marginally from 85.20% to
                 86%.

                 Cost of sales including depreciation,  decreased marginally for
                 the  nine  month   period  ended  August  31,  1998  and  1997,
                 respectively.  The decrease from $9,089,820 to $8,247,221 is in
                 line  with the  decrease  in  contract  hire and  vehicle  sale
                 revenue of $10,915,009 to  $10,077,894.  As a percent of sales,
                 the  percentage  decreased from 83.28% to 81.83% when comparing
                 the  nine  month   period  ended  August  31,  1998  and  1997,
                 respectively.


                                    Page 11.

<PAGE>
                 General and administrative  expenses increased by $282,443,  or
                 27.43%, when comparing the nine month periods ending August 31,
                 1998 and 1997.  This  increase  is in line with the  $1,838,425
                 increase in contract hire and fleet management income of 29.5%,
                 when  comparing the nine month period ended August 31, 1998 and
                 1997, respectively.

                 For  the  nine   months   ended   August  31,  1998  and  1997,
                 respectively,  interest expense increased by $622,851. Interest
                 expense  increased by $145,431  when  comparing the three month
                 periods  ended August 31, 1998 and 1997.  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 to fund
                 increased working capital requirements.

                 For the nine months ended August 31, 1998 and 1997, the Company
                 reported,  after amortization of goodwill of ($473,040 for both
                 periods), a loss of $894,826 and $60,618, respectively.

                 For the three  months  ended  August  31,  1998 and  1997,  the
                 Company reported,  after  amortization of goodwill of ($157,680
                 for both periods) a loss $481,218 and $72,416, respectively.

                 Liquidity and Capital Resources

                 Net cash provided from operating  activities for the nine month
                 periods  ended August 31, 1998 and 1997  aggregated  $3,147,259
                 and $2,364,682, respectively. The Company utilized net cash for
                 investing  activities  (for the  purchase of revenue  producing
                 assets) of $3,505,487 and $8,719,369 for the nine month periods
                 ended August 31, 1998 and 1997, respectively. Net cash utilized
                 by financing  activities was $132,914 for the nine-month period
                 ended  August  31,  1998.   Net  cash   provided  by  financing
                 activities  aggregated  $6,334,282  for the  nine-month  period
                 ended August 31, 1998.

                 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
                 Exhibit 11 - Computation  of Earnings Per Share - not required,
                 no dilutive common stock equivalents





                                    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: October 14, 1998                             PRIDE AUTOMOTIVE GROUP, INC.




                                                           By: /s/ Alan Lubinsky
                                                    Chief Executive Officer, and
                                                    Principal Accounting Officer

                                    Page 14.