<PAGE>

--------------------------------------------------------------------------------
                                          
                         SECURITIES AND EXCHANGE COMMISSION
                               Washington, D.C. 20549
                                     Form 10-K
                                
                   Annual Report Pursuant to Section 13 or 15(d)
                       of the Securities Exchange Act of 1934

          For the fiscal year ended:         Commission file number:
              December 31, 1997                      0-21139

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

                           DURA AUTOMOTIVE SYSTEMS, INC.
               (Exact name of Registrant as specified in its charter)

                 DELAWARE                              38-3185711
          (State of Incorporation)        (I.R.S. Employer Identification No.)

             4508 IDS CENTER
          MINNEAPOLIS, MINNESOTA                          55402
          (Address of Principal                        (Zip Code)
            Executive Offices)

         Registrant's telephone number, including area code: (612) 342-2311
                            
                   ---------------------------------------------
                                          
         Securities registered pursuant to Section 12(b) of the Act:  None
            Securities registered pursuant to Section 12(g) of the Act:
                   Class A Common Stock, par value $.01 per share
                                
                   ---------------------------------------------

     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 
                                                     -----
     Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained, to the
best of Registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K.  [X]

     As of February 27, 1998, 4,165,251 shares of Class A Common Stock of the 
Registrant were outstanding and the aggregate market value of the Class A 
Common Stock of the Registrant (based upon the last reported sale price of 
the Common Stock at that date by the Nasdaq National Market System), excluding 
shares owned beneficially by affiliates, was approximately $128,569,000.  In 
addition, 4,654,380 shares of Class B Common Stock of the Registrant were 
outstanding at February 27, 1998.

Information required by Items 10, 11, 12 and 13 of Part III of this Annual
Report on Form 10-K incorporates by reference information (to the extent
specific sections are referred to herein) from the Registrant's Proxy Statement
for its annual meeting to be held May 21, 1998 (the "1998 Proxy Statement").

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


<PAGE>

                           DURA AUTOMOTIVE SYSTEMS, INC.
                             ANNUAL REPORT ON FORM 10-K
                                          
                                 TABLE OF CONTENTS
                                          

PART I

     Item 1.   Business
     Item 2.   Properties
     Item 3.   Legal Proceedings
     Item 4.   Submission of Matters to a Vote of Security Holders

PART II

     Item 5.   Market for Registrant's Common Equity and Related Stockholder
               Matters
     Item 6.   Selected Financial Data
     Item 7.   Management's Discussion and Analysis of Results of Operations and
               Financial Condition
     Item 8.   Financial Statements and Supplementary Data
     Item 9.   Changes in and Disagreements with Accountants on Accounting and
               Financial Disclosure

PART III

     Item 10.  Directors and Executive Officers of the Registrant
     Item 11.  Executive Compensation
     Item 12.  Security Ownership of Certain Beneficial Owners and Management
     Item 13.  Certain Relationships and Related Transactions

PART IV

     Item 14.  Exhibits, Financial Statement Schedules, and Reports on Form 8-K



                                        -2-
<PAGE>
                                          
                                       PART I
                                          
ITEM 1.   BUSINESS

     (a)  GENERAL DEVELOPMENT OF BUSINESS

     BACKGROUND OF COMPANY

     Dura Automotive Systems, Inc. and its subsidiaries (collectively 
referred to as the "Company") is a leading designer and manufacturer of 
driver control systems, engineered mechanical components and cable-related 
systems for the global automotive industry.  The Company's products include 
parking brake systems, automotive cables, transmission shifter systems, 
latches, underbody tire carriers, jacks, brake, clutch and accelerator 
pedals and other mechanical assemblies.  The Company sells its products to 
the major North American, Japanese and European automotive original equipment 
manufacturers ("OEMs").  The Company has 26 manufacturing and product 
development facilities located in the United States (Indiana, Michigan, 
Missouri), Australia, Canada, France, Germany, Mexico, and Spain, and in 
Brazil through a joint venture.  The Company's revenues have increased from 
$129.3 million in 1993 to $489.8 million in 1997 on a pro forma basis, a 
compound annual growth rate of approximately 40%.  Over this same period, the 
Company's operating income margin has improved from 2.8% of revenues to 7.6% 
of revenues.

     The Company believes that it is a leading North American supplier of 
parking brake mechanisms, transmission shifter mechanisms and automotive 
cables, with estimated market shares in excess of 75%, 40% and 25%, 
respectively.  In addition, the Company is one of the few suppliers to offer 
integrated parking brake, shifter and latch systems. These systems, which 
consist of mechanisms and cables, require significant design and engineering 
expertise because they are critical to the vehicle's reliability, performance 
and safety.  The Company believes that its customers value its ability to 
design, manufacture and assemble complete systems.

     The automotive components supply industry is undergoing significant 
consolidation and globalization as OEMs continue to reduce their supplier 
base. In order to lower costs and improve quality, OEMs are awarding 
sole-source contracts to full-service suppliers who are able to supply larger 
portions of a vehicle on a global basis.  OEMs' criteria for supplier 
selection include not only cost, quality and responsiveness, but also 
full-service design, engineering and program management capabilities.  OEMs 
are seeking suppliers capable of providing complete systems 
rather than suppliers who only provide separate component parts.  In 
addition, OEMs are increasingly requiring their suppliers to have the 
capability to design and manufacture their products in multiple geographic 
markets.  As a full-service supplier with strong OEM relationships, the 
Company expects to continue to benefit from these trends.

     On a pro forma basis, approximately 81% of the Company's 1997 revenues 
are in North America with its major customers being Ford, GM, Chrysler and 
Toyota.  The Company manufactures products for many of the most popular car, 
light truck and sport utility models, including eight of the top ten selling 
vehicles in North America for 1997:  the Ford Taurus, Explorer, Ranger and 
F-Series pickups, GM Cavalier and C/K pickups, Dodge Ram pickups, and Toyota 
Camry.  As a result of recent acquisitions, approximately 17% of the 
Company's 1997 pro forma revenues were generated from sales to European OEMS 
including Mercedes, Volkswagen and BMW.  The Company is generally the sole 
supplier of the parts it sells to 

                                        -3-
<PAGE>

OEMs and will ordinarily continue to supply parts for a particular model for 
the life of the model, which usually ranges from three to seven years.

     The Company was formed by an investor group organized by Hidden Creek 
Industries ("Hidden Creek") to acquire the Dura Automotive Hardware and 
Mechanical Components divisions (the "Dura Divisions") from Wickes 
Manufacturing Company ("Wickes").  In August 1994, the Company 
combined its operations with the automotive parking brake cable and lever 
business and light duty cable business (the "Brake and Cable Business") of 
Alkin Co. ("Alkin") which significantly expanded the Company's size and 
capabilities. The Company completed an initial public offering of 3,795,000 
shares of its Class A common stock in August 1996.

     Since August 1994, the Company has successfully completed the following 
strategic acquisitions and joint ventures:

  -  In August 1996, the Company formed a joint venture with Excel Industries 
Inc. ("Excel") to participate equally in the acquisition of a 25.5% interest 
in Pollone S.A. ("Pollone"), a manufacturer of automotive components and 
mechanical assemblies headquartered in Sao Paulo, Brazil, for $5.0 million in 
total.  The joint venture also loaned Pollone an additional $10.5 million 
pursuant to notes which are convertible into equity of Pollone at the joint 
venture's option.  In January 1998, the joint venture increased its interest 
in Pollone to 51.0% through the conversion of certain of these notes. This 
investment provided the Company with a manufacturing presence in Latin 
America.

  -  In October 1996, the Company acquired the parking brake business of 
Rockwell Light Vehicle Systems France S.A. for approximately $3.8 million.  
The parking brake business, which is operated from a facility in Cluses, 
France, added a manufacturing presence in Europe and PSA (Peugeot and Citroen) 
and Renault as customers.

  -  In December 1996, the Company acquired KPI Automotive Group ("KPI") from 
Sparton Corporation for approximately $78.8 million.  KPI manufactures 
shifter systems, parking brake mechanisms, brake pedals and underbody tire 
carriers for the North American automotive industry from facilities in 
Indiana and Michigan.  The acquisition added significant market penetration 
in console-based shifter systems, increased platform content and added a 
significant new product line in underbody tire carriers.

  -  In January 1997, the Company acquired the VOFA Group ("VOFA") for 
approximately $38.0 million in cash and assumed indebtedness, plus contingent 
payments.  VOFA designs and manufactures shifter cables, brake cables and 
other light duty cables for the European automotive and industrial markets 
from facilities in Dusseldorf, Gehren and Daun, Germany and Barcelona, Spain. 
The acquisition added new customers such as Mercedes, Volkswagen and BMW, 
provided a strong European position and established the Company's cable 
manufacturing capabilities globally.

  -  In May 1997, the Company acquired the automotive parking brake business 
from Excel for approximately $2.9 million.  The acquisition increased the 
Company's penetration of the parking brake market and expanded the Company's 
relationship with Chrysler.

                                        -4-
<PAGE>

  -  In August 1997, the Company acquired GT Automotive Systems, Inc. ("GT 
Automotive") for approximately $45.0 million in cash and assumed 
indebtedness, plus contingent payments.  GT Automotive designs and 
manufactures column-mounted shifter systems and turn signal and tilt lever 
assemblies for North American OEMs.  At the time of the acquisition, GT 
Automotive had a substantial share of the North American column-based shifter 
market. The acquisition of GT Automotive, combined with the Company's 
existing position in console-based shifter systems, increased the Company's 
share of the North American shifter market. In addition, the acquisition 
added Nissan as a customer.

  -  In December 1997, the Company purchased approximately 19% of the 
outstanding common stock of Thixotech Inc. ("Thixotech") for approximately 
$0.5 million.  The Company also loaned Thixotech an additional $2.8 million 
pursuant to notes which are convertible into additional common stock of 
Thixotech at the Company's option.  If exercised, the Company could own a 
majority of Thixotech. Thixotech is currently pursuing the development of an 
alternative manufacturing technology for component parts.

  -  In December 1997, the Company acquired REOM Industries ("REOM"), an 
Australian designer and manufacturer of jacks and parking brakes, for 
approximately $3.7 million.  The acquisition added market penetration in 
parking brakes, a new product (jacks) and established a presence in the 
Pacific Rim.

  -  The Company is currently in the process of acquiring Universal Tool & 
Stamping, Inc. ("Universal"), a manufacturer of jacks for the North American 
automotive industry.  Universal had 1997 revenues of approximately $37.0 
million. Universal's customers include General Motors, Ford and Honda.  The 
acquisition provides the Company with a market presence for jacks in North 
America and adds Honda as a significant new customer.

     In order to focus on its higher margin products, the Company sold its 
window regulator business to Rockwell International Corporation ("Rockwell") 
in April 1995 for approximately $18.0 million in cash, resulting in a pretax 
gain of $4.2 million.

INDUSTRY TRENDS

     The Company's performance and growth is directly related to certain 
trends within the automotive market, including the consolidation of the 
component supply industry, the growth of system sourcing and the increase in 
global sourcing.

     SUPPLIER CONSOLIDATION.  During the 1990s, OEMs have been reducing their 
supplier base in certain product segments, including mechanical assemblies, 
awarding sole-source contracts to full-service suppliers.  As a result, OEMs 
currently work with a smaller number of full-service suppliers, each of which 
supplies a greater proportion of the total vehicle.  These requirements can 
best be met by suppliers with sufficient size and financial resources to meet 
such demands.  For full-service suppliers such as the Company, the new 
environment provides an opportunity to grow by obtaining business previously 
provided by other non full-service suppliers and by acquiring suppliers that 
further enhance product, manufacturing and service capabilities.  OEMs 
rigorously evaluate suppliers on the basis of product quality, cost control, 
reliability of delivery, product design capability, financial strength, new 
technology implementation, quality and condition of facilities and overall 
management. Suppliers that obtain superior ratings are considered for 
sourcing new business; those that do not generally continue their existing 
contracts, but normally do not receive additional business.  Although these 
new supplier policies have already 

                                        -5-
<PAGE>

resulted in significant consolidation of component suppliers in certain 
segments, the Company believes that opportunities exist for further 
consolidation within the Company's segment.  This is particularly true in 
Europe which has many suppliers in this segment, many with relatively small 
market shares.

     SYSTEM SOURCING.  OEMs increasingly seek suppliers capable of 
manufacturing complete systems of a vehicle rather than suppliers who only 
produce the separate parts that comprise a system.  By outsourcing complete 
systems, OEMs are able to reduce their costs associated with the design and 
integration of different components and improve quality by enabling their 
suppliers to assemble and test major portions of the vehicle prior to 
beginning production.  The Company has capitalized on this trend by designing 
its mechanisms and cable systems to function together and by providing cable 
and mechanism designs that are integrated into the design of the entire 
vehicle.

     GLOBAL SOURCING.  Regions such as Asia, Latin America and Eastern Europe 
are expected to experience significant growth in vehicle demand over the next 
ten years.  OEMs are positioning themselves to reach these emerging markets 
in a cost-effective manner by seeking to design and produce "world cars" 
which can be designed in one vehicle center but produced and sold in many 
different geographic markets, thereby allowing OEMs to reduce design costs 
and take full advantage of low-cost manufacturing locations.  OEMs 
increasingly are requiring their suppliers to have the capability to design 
and manufacture their products in multiple geographic markets.

     The Company has seven manufacturing facilities located in France, 
Germany, Spain, Australia and through its joint venture in Brazil. In 
addition, Company has formed, or is in the process of forming, strategic 
alliances with other suppliers throughout the world. These strategic 
alliances, which range from investments in other manufacturers to informal 
understandings, should not only give the Company access to new geographic 
markets and customers, but also the capability of offering complementary 
products.  The Company also has two technical centers located at its 
facilities in Europe and it has relocated technical personnel resources to 
locations in which OEMs will develop "world cars."  By participating in the 
design of these vehicles and through implementation of manufacturing 
processes near the international facilities of the OEMs, the Company believes 
it can continue to expand on its international presence.

BUSINESS STRATEGY

     The Company's business objective is to capitalize on the consolidation, 
globalization and system/modular sourcing trends in the automotive supply 
industry in order to be the leading provider of driver control systems, 
engineered mechanical components and cable-related systems to OEMs 
worldwide. Key elements of the Company's operating and growth strategies are 
outlined below:

     OPERATING STRATEGY

     FULL SERVICE DESIGN AND ENGINEERING CAPABILITIES.  The Company has 
maintained a technological advantage through its investment in product 
development and advanced engineering.  The Company works with OEMs throughout 
the product development process from concept vehicle and prototype 
development through the design and implementation of manufacturing processes. 
The Company's computer-aided design systems are compatible with its major 
customers, enabling the Company to communicate design developments with 
customer engineers throughout the design and development stage.

                                        -6-
<PAGE>

     EFFICIENT MANUFACTURING/CONTINUOUS IMPROVEMENT PROGRAMS.  The Company 
continues to implement strategic initiatives designed to improve product 
quality and reduce manufacturing costs through, among other things, the 
introduction of cellular manufacturing methods, consolidation of 
manufacturing facilities, improvement in inventory management and reduction 
of scrap.  Manufacturing flexibility enables the Company's facilities to 
produce modules and systems in a cost-effective manner and strengthens the 
Company's ability to meet the just-in-time and in-line sequence delivery 
schedules of many of its customers. In addition, the Company utilizes the 
Dura Operating System, which is a common set of key metrics used in all 
facilities, to measure actual performance in comparison to standards and 
goals.

     STRONG CUSTOMER RELATIONSHIPS.  The Company has developed strong 
customer relationships with over 20 OEMs based on its long history of 
high-quality manufacturing and full system customer support.  Significant 
investment in design and engineering capabilities drive new product 
development, lower costs and provide the capabilities necessary to produce 
complete systems.  Access to and relationships with OEMs' engineering and 
purchasing personnel allow the Company to identify business opportunities and 
react to customer needs in the early stages of vehicle design and give it a 
competitive advantage in securing new business.

     DECENTRALIZED, PARTICIPATORY CULTURE.  The Company's decentralized 
approach to managing its manufacturing facilities encourages decision making 
and employee participation in areas such as manufacturing processes and 
customer service. This "team" approach enhances communication of strategic 
direction and goals while facilitating a greater success rate in reaching and 
exceeding its objectives and fosters a unified culture. The Company provides 
ownership-related incentives to managers and salaried and hourly employees 
through grants under the 1996 Key Employee Stock Option Plan and 
participation in the Dura Automotive Systems, Inc. Employee Stock Discount 
Purchase Plan.

GROWTH STRATEGY

     STRATEGIC ACQUISITIONS.  Since August 1994, the Company has successfully 
completed seven strategic acquisitions and two joint ventures.  The Company 
seeks to make acquisitions that:  (i) provide additional product, 
manufacturing and technical capabilities; (ii) broaden the Company's 
geographic coverage and strengthen its ability to supply 
products on a global basis; (iii) increase the number of models for which the 
Company supplies products and increase the content level on existing models; 
and (iv) add new customers.  The Company competes in what it believes to be a 
$6 billion, highly fragmented market that provides numerous potential 
acquisition and joint venture opportunities.

     FOCUS ON HIGHER VALUE-ADDED SYSTEMS AND MODULES.  OEMs continue to seek 
suppliers capable of manufacturing complete modules and systems for a vehicle 
rather than suppliers that produce only the component parts which comprise a 
module or system.  Systems manufacturing offers OEMs the opportunity for 
significant cost savings and improved product quality and consistency.  By 
capitalizing on the Company's existing product portfolio and through the 
combination of multifunctional mechanical and cable products, the Company 
intends to continue to expand its capabilities to provide additional 
integrated modules and systems.

     INCREASE PLATFORM AND CUSTOMER PENETRATION.  The Company's strategy is 
to increase volume by adding new customers and to strengthen existing 
customer relationships by broadening its range of products through internal 
development efforts and acquisitions.  During 1997, the Company established 
important new customer relationships with Mercedes, Volkswagen and BMW 
through the acquisition of VOFA.  While maintaining its strong relationships 
with Ford and GM, the Company has also successfully increased its 
participation in 

                                        -7-
<PAGE>

the supply of its other customers' model lines.  For example, during 1991, 
the Company participated in only a limited number of Toyota's production 
models.  By 1997, the Company had established a supply relationship that 
covers a full range of Toyota vehicles, including two models manufactured in 
Japan.  The Company has also increased the sales content on popular vehicle 
platforms such as Ford's Taurus/Sable and Escort, Chrysler's minivan and 
Grand Cherokee, Dodge Ram and Dakota Pickups by providing additional products 
which were developed by the Company or added to its product line through 
acquisition.

     EXPAND PENETRATION OF INTERNATIONAL MARKETS.  In 1997, over 70% of total 
worldwide passenger vehicle production occurred outside North America.  To 
meet OEMs' increasing preference for suppliers with global capabilities, the 
Company has expanded its manufacturing operations into new geographic markets 
through strategic acquisitions and joint ventures. Consistent with this 
strategy, the Company believes that the VOFA (Germany and Spain), Rockwell 
Light Vehicle Systems France S.A. (France) and REOM (Australia) acquisitions 
as well as the Pollone (Brazil) joint venture will expand its ability to 
serve its customers globally.  The Company believes that increased 
international sales will allow the Company to mitigate the effects of 
cyclical downturns in a given geographic region and further diversify the 
Company's OEM customer base.  In addition, the Company believes that its 
increased international presence will provide a competitive advantage in the 
pursuit of certain "world car" supply opportunities.

     PRODUCTS

     The Company's product offerings include: automotive cables (such as 
parking brake, shifter, throttle, oil level, hood release, and fuel door); 
parking brake mechanisms (foot and hand operated); transmission shifter 
mechanisms (manual and automatic console-based and column-mounted); latches 
(primary, secondary, and combination hood, deck lid and tail gate); and other 
engineered mechanical components (such as underbody tire carriers, jacks, 
brake, clutch and accelerator pedals, tilt lever and turn signal assemblies). 
The Company believes that it is the leading North American supplier of 
parking brake mechanisms, transmission shifter mechanisms and automotive 
cables, with estimated market shares in excess of 75%, 40% and 25%, 
respectively. The Company offers individual components as well as integrated 
parking brake, shifter and latch systems, which consist of mechanisms and 
cables.

     The following table sets forth the approximate composition by product 
category of the Company's revenues on a pro forma basis for the last three 
fiscal years:

                                                  Year Ended December 31,
                                              -------------------------------
Product Category                              1997         1996          1995
                                              ----         ----          ----

Parking brake mechanisms                       23%          39%           57%
Automotive cables                              38            39           29
Latches                                         4            12            9
Transmission shifter mechanisms                24             4            3
Other body hardware                            11             6            2
                                              ----         ----          ----
    Total                                     100%         100%          100%
                                              ----         ----          ----
                                              ----         ----          ----


                                        -8-
<PAGE>


     CUSTOMERS AND MARKETING

     The North American automotive market is dominated by Ford, GM and 
Chrysler, with Japanese and foreign manufacturers accounting for 
approximately 20% of the market.  In North America, the Company supplies its 
products primarily to Ford, GM, Chrysler and Toyota. As a result of recent 
acquisitions, the Company added Mercedes, Volkswagen and BMW as new customers 
in 1997.

     The following is a summary of the Company's customers that accounted for 
a significant portion of consolidated revenues in the past three fiscal years:

                                                  Year Ended December 31,
                                              -------------------------------
Customer                                      1997         1996          1995
                                              ----         ----          ----

Ford                                            42%          49%           52%
GM                                              25           36            35
Chrysler                                         7            8             6
Toyota                                           4            5             5
Mercedes                                         4            -             -
Volkswagen                                       4            -             -
BMW                                              3            -             -
Other                                           11            2             2
                                              ----         ----          ----
    Total                                      100%         100%          100%
                                              ----         ----          ----
                                              ----         ----          ----

     The Company's customers award contracts for a particular car platform, 
which may include more than one car model.  Such contracts range from one 
year to the life of the model, which is generally up to seven years, and do 
not require the purchase by the customer of any minimum number of parts.  The 
Company also competes for new business to supply parts for successor models 
and therefore is subject to the risk that the OEM will not select the Company 
to produce parts on a successor model.  Because the Company supplies parts 
for a broad cross-section of both new and mature models, its reliance on any 
particular model is minimized.  The Company manufactures products for many of 
the most popular car, light truck, sport utility and mini-van models in North 
America and Europe. Although not comprehensive, the following table presents 
an overview of the major models for which the Company has orders to supply 
products on current or new model vehicles:

                                        -9-
<PAGE>

     Customer                 Car Models                   Truck Models
-----------------   ------------------------------   -----------------------

Ford                Escort/Tracer, Fiesta *,         Bronco, Econoline, 
                    Mustang, Ka* Contour/Mystique/   Expedition/Navigator, 
                    Mondeo*, Continental/Town Car,   Navajo/Explorer/
                    Mark/Mark VIII, Taurus/Sable,    Mountaineer, F-Series, 
                    Cougar, Crown Victoria/          Ranger, Villager, 
                    Grand Marquis                    Windstar Autoeuropa 
                                                     MPV*, Escort Van*
GM                  Achieva/Grand Am, Century,       Safari/Astro, Blazer/
                    Corvette, Deville/Seville/       Bravada/Jimmy, C/K Pickup/
                    Eldorado, Firebird/Camaro,       Tahoe/Sierra/Yukon, 
                    Lumina/Monte Carlo/Regal/        Silhouette/TransSport/
                    Intrigue, Aurora/Riviera/Park    Venture, S-10 Pick-up/
                    Avenue, Olds 88/Bonneville/      Sonoma, Suburban
                    LeSabre, Saturn/Innovate, 
                    Sunfire/Cavalier, Malibu/
                    Cutlass/Grand Prix, Astra*,
                    Corsa*, Vectra*
Chrysler            Intrepid/Concorde/LHS/300M,      Caravan/Voyager, Dakota/
                    Neon, Prowler, Viper,            Durango, Grand Cherokee/
                    Cirrus, Stratus, Breeze          Cherokee, Ram Van and 
                                                     Pickup, Wrangler 
Toyota              Avalon, Camry, Corolla, Lexus*,  Sienna, Toyota Pickup
                    Prizm, Solara
Mercedes*           A, C, E, M and S Class, Cabrio   -
Volkswagen/Audi*    Polo, Golf, Passat, A4, A8       Transporter, Bus
BMW*                3, 5, 7 and 8 Series             -

* Indicates models manufactured outside North America

     Most of the parts the Company produces have a lead time of two to five
years from product development to production.  Although not comprehensive, the
following table presents an overview of the major models for which the Company
has been awarded new business (i.e., parts not currently supplied by the
Company):

        Model Year                             Model
        ----------                             -----
 
           1999                   GM Corsa* park brake and door cables and
                                  Innovate shifter system
                                  Chrysler Grand Cherokee parking brake system 
                                  and shifter and hood release cables
                                  Peugeot* TI parking brake
                                  Cami Sidekick shifter
           2000                   GM Lumina/Monte Carlo shifter and C/K
                                  Pickup hood latch
           2001                   Ford Explorer shifter

* Indicates model manufactured outside of North America

     DESIGN AND ENGINEERING SUPPORT

     The Company believes that engineering service and support are key 
factors in successfully obtaining new business.  The Company utilizes program 
management with customer-dedicated program teams, which have full design, 
development, test and commercial issues under the operational control of a 
single manager.  In addition, cross-functional teams are established for each 
new program to ensure efficient product development from program conception 
through product launch.  The advanced technology development group focuses on 
enhancing product and process technology.

     The Company has four technical centers, two in Michigan, one in
Germany and one in France.  A separate Advanced Technology Group has been
established to maintain the Company's position as a technology leader.  The
Advanced Technology Group has developed many innovative features in the
Company's products, including many features which were 

                                        -10-
<PAGE>

developed in conjunction with the Company's customers.  The Company utilizes 
Computer Aided Designs ("CAD") in the design process, which enables the 
Company to share data files with its customers via compatible systems during 
the design stage, thereby improving function, fit and performance within the 
total vehicle.  The Company also utilizes CAD links with its manufacturing 
engineers to enhance manufacturability and quality of the designs early in 
the development process.

     The Company has more than 200 patents granted or in the application 
process.  The patents granted expire over several years beginning in June 
1998. Although the Company believes that, taken together, the patents are 
significant, the loss or expiration of any particular patent would not be 
material to the Company.

     MANUFACTURING

     In manufacturing its products, the Company utilizes two different 
manufacturing processes, one for mechanisms and one for cables that will 
ultimately attach to such mechanisms, creating a system.  The Company 
utilizes flexible manufacturing cells in both the mechanism and cable 
assembly processes. Manufacturing cells are clusters of individual 
manufacturing operations and work stations grouped in a cylindrical 
configuration, with the operators placed centrally within the configuration.  
This provides flexibility by allowing efficient changes to the number of 
operations each operator performs.  When compared to the more traditional, 
less flexible assembly line process, cell manufacturing allows the Company to 
maintain its production output consistent with its customers' requirements 
and reduce the level of inventory.

     Mechanical assemblies consist of between five and 50 individual 
components, which are attached to form an integrated mechanism.  The 
Company's assembly operations are performed on either dedicated, high-volume, 
automated assembly machines or on low capital-intensive, flexible, 
cell-oriented assembly units capable of low or high volume production runs.  
The assembly operations construct the final product through hot or cold 
forging machines, plastic injection molding, welding, staking and riveting 
the component parts.  A large portion of the component parts are purchased 
from outside suppliers to the Company.  However, the Company manufactures its 
own stampings, a process which consists of passing sheet metal through dies in 
a stamping press to form the metal into three-dimensional parts.  The Company 
produces stamped parts using single-stage and progressive dies in presses, 
which range in size from 150 to 600 tons.  Through cell teams, which stress 
employee involvement, the Company's processes are continuously upgraded to 
increase flexibility, improve operating safety and minimize changeover times 
of the dies.

     Cables are manufactured using a variety of processes, including plastic 
injection molding, extrusion, wire flattening, spring making and zinc 
diecasting.  Wire is purchased from outside suppliers and then formed into 
contra-twisted layers on tubular stranders and bunching machines to produce 
up to 19-wire stranded cable.  Corrosion resistance is provided by a 
proprietary, ceramic coating applied during the stranding process.  The cable 
then is plastic-coated by an extrusion process to provide a smooth, low 
coefficient surface that results in high efficiency and durability.  Conduit 
is then produced by flattening and coiling wire, which is then extruded with 
a protective coating.  Proprietary strand and conduit cutting machines enable 
efficient processing.  Assembly operations are arranged in cells to minimize 
inventory, improve quality, reduce scrap, improve productivity and enhance 
employee involvement.  The cables are assembled with various attachments and 
end fittings that allow the customer to install the cables to the appropriate 
mating mechanisms.

                                        -11-
<PAGE>

     The Company utilizes frequent communication meetings at all levels of 
manufacturing to provide training and instruction as well as to assure a 
cohesive, focused effort toward common goals.  The Company encourages 
employee involvement in all production activity and views such involvement as 
a key element in the success of the Company.  The Company also 
aggressively pursues involvement from its suppliers, which is necessary to 
assure a consistent flow of raw materials and components on a timely basis 
with consistently high quality.  The Company utilizes the component suppliers 
where practical in the design and prototype stages of the new product 
development to facilitate the most comprehensive, state-of-the-art designs 
available.  The Company has made substantial investments in manufacturing 
technology and product design capability to support its products, including 
modern manufacturing equipment, fineblanking, sophisticated computer-aided 
design systems and highly-trained engineering personnel.  These advanced 
capabilities have helped to further reduce scrap rates, ensure superior 
product quality and increase efficiency.

     The automotive industry has adopted a quality rating system known as 
QS-9000, a rigorous inspection of a suppliers' facilities and operating 
systems performed by independent certified auditors.  Certification and 
on-going maintenance of certification is mandatory for future supply 
consideration.  The Company has received QS-9000 certification at all of its 
facilities except the French operation, which is scheduled for certification 
in 1998.

     The Company's plants have been recognized by its customers with various 
awards, such as the Chrysler Pentastar Award, GM Target for Excellence, Nummi 
Delivery Performance Award, Isuzu Quality Achievement Award and Calsonic 
Supplier of the Year Award. The Company has received Ford Q-1 
certification at all facilities shipping current model Ford product.

     COMPETITION

     The Company principally competes for new business at the beginning of 
the development of new models and upon the redesign of existing models.  New 
model development generally begins two to five years before marketing of such 
models to the public.  Once a producer has been designated to supply parts 
for a new program, an OEM usually will continue to purchase those parts from 
the designated producer for the life of the program, although not necessarily 
for a redesign.  Competitive factors in the market for the Company's products 
include product quality and reliability, cost, timely delivery, technical 
expertise and development capability, new product innovation and customer 
service.  The Company operates in a highly competitive environment.  The 
number of the Company's competitors has decreased due to the supplier 
consolidation resulting from changing OEM policies.  The Company's primary 
competitors in mechanisms are:  Adwest Incorporated, Scharwaechter GmbH & Co. 
("Edscha"), Teleflex Incorporated, Ficosa International, S.A., Ventra Group, 
Inc. ("Seeburn Division"), and Aries Industries. The Company's primary 
competitors in cables are Teleflex Incorporated, Ficosa International, S.A., 
Trident Automotive plc and Nippon Cable System Inc.

     SUPPLIERS AND RAW MATERIALS

     The principal raw materials purchased by the Company are steel, wire and 
resin.  The types of steel the Company purchases include hot and cold rolled, 
galvanized, organically coated and aluminized steel.  In general, the wire 
used by the Company is produced from steel with many of the same 
characteristics with the exception that it has a higher carbon content.  The 
Company utilizes plastic resin to produce the protective coating for its 
cables and production of shifter components.  The Company employs 
just-in-time manufacturing and sourcing systems 

                                        -12-
<PAGE>

enabling it to meet customer requirements for faster deliveries while 
minimizing its need to carry significant inventory levels.  The Company has 
not experienced any significant shortages of raw materials and normally does 
not carry inventories of raw materials or finished products in excess of 
those reasonably required to meet production and shipping schedules.

     The Company typically negotiates blanket purchase orders or 12-month 
supply agreements with integrated steel suppliers, mini-mills and service 
centers that have demonstrated timely delivery, quality steel and competitive 
prices.  These relationships allow the Company to order precise quantities 
and types of steel for delivery on short notice, thereby permitting the 
Company to maintain low inventories.  In addition, the Company occasionally 
may "spot buy" steel from service centers to meet customer demand, 
engineering changes or new part tool trials.

     Other raw materials purchased by the Company include dies, fasteners, 
springs, rivets and rubber products, all of which are available from numerous 
sources.

     EMPLOYEES

     As of December 31, 1997, the Company had approximately 5,200 employees,
approximately 825 of whom are salaried and the balance of whom are paid on an
hourly basis.  Approximately 2,170 employees located at the Company's facilities
in Matamoros, Mexico, Windsor and Brantford, Ontario, Dusseldorf, Gehren and
Daun, Germany, Barcelona, Spain, Melbourne, Australia and East Jordan and
Mancelona, Michigan are currently covered by collective bargaining agreements. 


<TABLE>
<CAPTION>
                                  Collective Bargaining                                                       
    Location                            Agreement                          Expiration
----------------       -------------------------------------------      ----------------
<S>                      <C>                                              <C>
 Mexico                  Confederacion de Trabajodores de Mexico          Annually
 Canada                  CAW                                              December 1998
                                                                          June 1999
                                                                          September 1999
 Germany                 IG-Metall                                        December 1998
 Spain                   Comisiones Oberera                               December 1999
 Australia               Australian Metals Workers                        No term
 United States           UAW                                              December 2000

</TABLE>


     Although management believes that the Company's relationship with its 
union employees at these facilities is good, there can be no assurance that 
the Company will be able to negotiate new agreements on favorable terms.  In 
the event the Company is unsuccessful in negotiating new agreements, these 
facilities could be subject to work stoppages, which could have a material 
adverse effect on the operations of the Company.

     (b)  SAFE HARBOR PROVISIONS

     Forward-looking statements included in this Form 10-K are made pursuant 
to the safe harbor provisions of the Private Securities Litigation Reform Act 
of 1995.  There are certain important factors that could cause future results 
to differ materially from those that might be anticipated based on some of 
the statements made in this report.  Investors are cautioned that all 
forward-looking statements involve risks and uncertainty.  Among the factors 
that could cause actual results to differ materially are the following:

                                        -13-
<PAGE>

  -  RELIANCE ON MAJOR CUSTOMERS.  The Company's two largest customers, Ford and
GM, represented approximately 42% and 25%, respectively, of the Company's 1997
revenues.  The loss of Ford, GM or any of the Company's other significant
customers could have a material adverse effect on the Company.

  -  INDUSTRY CYCLICALITY AND SEASONALITY.  The automotive market is highly
cyclical and is dependent on consumer spending.  Economic factors adversely
affecting automotive production and consumer spending could adversely impact the
Company.

  -  FAILURE TO OBTAIN BUSINESS RELATED TO NEW AND REDESIGNED MODEL
INTRODUCTIONS.  The Failure of the Company to obtain new business on new models
or to retain or increase business on redesigned existing models could adversely
affect the Company.

  -  PRODUCT LIABILITY EXPOSURE.  The Company faces an inherent business risk of
exposure to product liability claims in the event that the failure of its
products result in personal injury or death, and there can be no assurance that
the Company will not experience material product liability losses in the future.

ITEM 2.   PROPERTIES

     FACILITIES

     The following table provides information regarding the Company's 
principal facilities.  The Company believes that the productive capacity and 
utilization of its facilities are sufficient to allow the Company to conduct 
its operations in accordance with its business strategy.  All of the owned 
facilities are subject to liens under the Company's credit agreement.

                                        -14-
<PAGE>

<TABLE>
<CAPTION>
                                    Square            Type of           Description
    Location                        Footage           Interest             of Use
------------------------------     ---------         ----------        -----------------------
<S>                                <C>               <C>               <C>
Barcelona, Spain                     179,000            Owned          Manufacturing
Mancelona, Michigan                  167,000            Owned          Manufacturing
Moberly, Missouri                    165,000            Owned          Manufacturing
Fremont, Michigan                    160,000            Owned          Manufacturing
Daun, Germany                        140,000            Owned          Manufacturing
East Jordan, Michigan                135,000            Owned          Manufacturing
Gehren, Germany                      129,000            Owned          Manufacturing
Dusseldorf, Germany                  113,000           Leased          Manufacturing/Product
                                                                       Development
Spring Lake, Michigan*                95,000            Owned          Manufacturing
White Cloud, Michigan*                94,000           Leased          Manufacturing
Hannibal, Missouri (South)            90,000            Owned          Manufacturing
Windsor, Ontario (2 locations)        84,000            Owned          Manufacturing
Livonia, Michigan                     84,000            Owned          Manufacturing
Melbourne, Australia                  77,500           Leased          Manufacturing
Hartford City, Indiana                70,000            Owned          Manufacturing
Brownstown, Indiana                   68,000            Owned          Manufacturing
Brantford, Ontario                    66,000            Owned          Manufacturing
Rochester Hills, Michigan             65,000           Leased          Product Development/
                                                                       Operating Headquarters
Hannibal, Missouri (North)            64,000            Owned          Manufacturing
Gladwin, Michigan                     60,000            Owned          Manufacturing
Brookfield, Missouri                  51,000            Owned          Manufacturing
Grand Haven, Michigan*                48,000           Leased          Product Development
Metamoros, Mexico                     42,000            Owned          Manufacturing
Warren, Michigan                      40,000           Leased          Manufacturing
   
Cluses, France                        10,000           Leased          Manufacturing
Minneapolis, Minnesota                 5,700           Leased          Corporate Headquarters

</TABLE>

* Manufacturing at these facilities will be consolidated into the 
Fremont, Michigan facility in 1998.


     Management believes that substantially all of its property and equipment 
is in good condition and that it has sufficient capacity to meet its current 
manufacturing needs.

ITEM 3.   LEGAL PROCEEDINGS

     The Company faces an inherent business risk of exposure to product 
liability claims in the event that the failure of its products results in 
personal injury or death, and there can be no assurance that the Company will 
not experience any material product liability losses in the future.  In 
addition, if any Company-designed products prove to be defective, the Company 
may be required to participate in a recall involving such products.

     In late 1994, Ford issued a recall of a series of manual transmission 
Ford F-Series pick-ups to repair the self-adjust parking brakes originally 
manufactured by the Brake and Cable Business.  Ford had received several 
reports that the brakes failed.  Pursuant to a letter agreement entered into 
in connection with the acquisition of the Brake and Cable Business, the 
Company agreed to reimburse Ford for up to $6.0 million of Ford's costs of 
the recall. The Company has reimbursed Ford for the full amount under this 
agreement.  The Company is also involved in a product recall relating to the 
same issue with respect to the Ford Mondeo in Europe.  The Company 
has agreed to pay 50% of the costs of that recall not to exceed $1.0 million, 
which payments totaled $.4 million as of December 31, 1997.

                                        -15-
<PAGE>

     The type of alleged failures that prompted the F-Series recalls have 
also led to a number of claims and lawsuits filed against Ford and, in 
certain instances, against the Company and/or Alkin.  The Company may be 
subject to claims brought directly against the Company by injured occupants 
of Ford vehicles and to claims for contribution or indemnification asserted 
by Ford. The agreement relating to the acquisition of the Brake and Cable 
Business provided that the Company is liable for claims arising out of 
accidents that take place on or after August 31, 1994 and that the Company 
will be liable for other claims only to the extent any losses by Alkin 
relating to such claims are not paid by Alkin's insurance policies (either 
because they are not over the deductible amount, because Alkin's policy 
limits have been exceeded or because they are not covered by Alkin's 
insurance policies for other reasons).  Two cases were brought directly 
against the Company or Alkin relating to personal injury claims, and Ford has 
received over 400 claims (generally for property damage) relating to alleged 
defects in the self-adjust parking brakes.  The claims that purport to seek 
recovery for personal injury allegedly as a result of the recall condition, 
with several exceptions, have generally involved relatively minor injuries, 
suffered principally while occupants were trying to stop or jump out of 
rolling vehicles.  Ford has maintained that the Company or Alkin is 
responsible for all damages or liabilities arising out of these claims. The 
Company disputes this position.  As of December 31, 1997, Ford had tendered its 
defense of 25 such claims to the Company and Alkin, and indicated that it 
would look to the Company and Alkin for indemnification were Ford ultimately 
found to be liable and required to make any payments relating to such claims. 
The Company and Alkin have submitted these claims to their insurance 
carriers.  The Company has attempted to work with Ford to address 
the claims arising from the self-adjust parking brakes originally 
manufactured by the Brake and Cable Business and does not believe that these 
claims have adversely affected its business relationship with Ford.

     From time to time, in the ordinary course of its business, the Company 
receives notice from a customer that a product may not be properly 
functioning. For example, in November 1995, the Company was notified by 
Chrysler that it had received reports of a number of parking brake failures 
in manual transmission vehicles, particularly in Europe.  Chrysler has 
notified the Company that as many as 60,000 vehicles may be affected. The 
Company is working with Chrysler to resolve this matter and does not believe 
the ultimate cost of resolution will have a material effect on the Company's 
results of operations and financial position.  In addition, Chrysler has 
alleged that KPI produced minivan brake pedals with improper pedal pad 
reinforcements, resulting in some failures as a consequence of pedal pads 
bending.  It is possible that Chrysler could seek contribution from the 
Company for costs it incurs if recalls were undertaken for these or similar 
matters or for costs associated with possible repairs.

     In June 1996, the Company was served with a complaint alleging a 
wrongful death as the result of injuries purportedly caused by a defectively 
designed rear latch on a Chrysler mini-van.  Chrysler and two other suppliers 
to Chrysler were also named as defendants in the complaint.  The lawsuit was 
referred to the Company's insurance carrier.  Chrysler agreed to assume the 
defense of, and to indemnify the Company with respect to, this claim as long 
as the plaintiffs do not make any claim alleging a manufacturing defect as it 
relates to the Company. The plaintiffs have not made such an allegation and 
the Company was dismissed from the claim.

     In early November 1996, the Company was served with a lawsuit brought by 
affiliates of AIG, the Company's excess insurance carrier, in Toronto, Canada 
seeking a declaratory 

                                        -16-
<PAGE>


judgment that the umbrella and excess liability policies that it had issued 
to Onex do not provide coverage in connection with allegedly defective 
self-adjust parking brakes manufactured by Alkin prior to August 31, 1994. 
The AIG policies at issue provided (a) the first layer of excess coverage 
(beyond the Company's $3 million primary policy per year) for claims arising 
from August 31, 1994 to April 1, 1996 in the amount of $20 million per year, 
and (b) an additional layer of excess coverage at $33 to $53 million per year.
In principal part, the AIG affiliates claim that the policies do not provide 
coverage with respect to products manufactured prior to August 31, 1994 or 
liabilities assumed by the Company pursuant to purchase agreements.  The AIG 
affiliates also claim that the policies should be voided with respect to 
self-adjust parking brake claims for inadequate disclosure at the time the 
policies were applied for.  The Company and Onex dispute the allegations of 
the Ontario lawsuit and have filed a counterclaim against the AIG affiliates 
for breach of contract.

     The Company believes it maintains adequate insurance, including product 
liability coverage, to cover the claims described above.  The Company has 
also established reserves in amounts it believes adequate to cover any 
adverse judgments.  However, any adverse judgment in excess of its insurance 
coverage and such reserves could result in a material adverse effect on the 
Company.

     ENVIRONMENTAL MATTERS

     The Company is subject to the requirements of Federal, state, and local 
environmental and occupational health and safety laws and regulations.  There 
can be no assurance that the Company is at all times in complete compliance 
with all such requirements.  Although the Company has made and will continue 
to make capital and other expenditures to comply with environmental 
requirements, the Company does not expect to incur material capital 
expenditures for environmental controls in 1998.  If a release of hazardous 
substances occurs on or from the Company's properties or any associated 
offsite disposal location, or if contamination is discovered at any of the 
Company's current or former properties, the Company may be held liable for 
remediation costs and expenses, and the amount of such liability could be 
material.

     In 1995, the Michigan Department of Environmental Quality ("MDEQ") 
requested that Wickes and the Company investigate environmental conditions at 
the Company's Mancelona facility and at certain adjacent property retained by 
Wickes.  Wickes and the Company jointly completed the requested investigation 
in January of 1996.  In 1997, Wickes and the Company agreed to undertake 
additional investigatory work requested by MDEQ.  The investigation found 
varying levels of trichlorethylene at levels well above acceptable 
drinking water levels in wells located off the Company's premises.  While the 
source of the contamination has yet to be identified, the Company immediately 
assumed the lead to establish acceptable sources of drinking water for 
residents.  The Company expanded its investigatory work to delineate and 
monitor the characteristics of the contamination.  Additional work plans and 
test results have been reported to the MDEQ.  Depending upon the results of 
this work, the Company could incur additional costs to further investigate or 
conduct cleanup at the facility.

     In 1993, the Company received requests for information pursuant to CERCLA
from the U.S. EPA with respect to two landfill sites located in Toledo, Ohio. 
In 1994, the Company received a notice of potential liability under CERCLA from
the EPA with respect to one of the sites.  The Company responded to the requests
and notice by explaining to the EPA that it had no involvement with these sites,
which ceased operations prior to the formation of the Company in 1990.  In
October 1996, the Company received notice that a motion had been filed to add
the Company as a defendant in a suit by the City of Toledo involving one of the
sites.  As of 

                                        -17-
<PAGE>


March 3, 1998, the Company has received no word of the disposition of the 
motion, the time period for services has expired and the Company has received 
no indication that the plaintiff intends to pursue a claim against it. The 
City alleges that the Company is liable as the successor-in-interest to Dura 
Corporation.  The Company has written to the City denying that the Company is 
a successor and urging that the claim against the Company be dropped.  The 
Company is awaiting a response.  If the claims go forward, the Company would 
be one of approximately 25 defendants.  The total recovery sought by the 
City, and the amount allegedly attributable to the Company, are unknown to 
the Company.

     In connection with the Company's acquisition of certain assets from 
Wickes in 1990, and subject to certain limitations, Wickes agreed to 
indemnify the Company for environmental liabilities arising from the 
operation of the acquired facilities prior to the acquisition.  The Company 
and Wickes subsequently agreed that the Company had provided Wickes with 
timely and adequate notice with respect to certain matters (including the 
matters described in the immediately preceding paragraph) and that, subject 
to the limitations set forth in the agreement, those matters are covered by 
the Wickes indemnification.  There can be no assurance, however, that all 
costs associated with such matters will ultimately be reimbursed by Wickes.  
The Company does not currently believe that any liability associated with the 
foregoing matters will be material to the Company.

     In December 1996, the Company acquired the stock of KPI from
Sparton Corporation ("Sparton").  In connection with the acquisition, such 
subsidiaries retained their liability under CERCLA with respect to certain 
waste disposal sites, subject to indemnification by Sparton for liability in 
excess of a $1 million aggregate threshold amount, up to a $15 million 
aggregate cap.  Of these sites, the sites as to which the subsidiaries' 
liability has not yet been resolved through a settlement are the Third Site 
in Zionsville, Indiana and the Northeast Gravel Site in Grand Rapids, 
Michigan.  Based upon estimates provided by Sparton, the cost to resolve the 
liability of the acquired subsidiaries at the Sparton-related sites is not 
currently expected to be material.

     In August 1997, the Company acquired GT Automotive.  In connection with 
the acquisition, a clean up report was commissioned to determine whether 
hazardous materials or hazardous substances were present in the soil, surface 
water or ground water at the Brantford, Ontario facility.  The 
Company believes that the cost of any environmental remediation with respect 
to this matter will not be material.

ITEM 4.   SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

     There were no matters submitted to a vote of Stockholders during the 
fourth quarter of 1997.

                                      PART II

ITEM 5.   MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED 
          STOCKHOLDER MATTERS

     The Class A Common Stock has traded on the Nasdaq National Market under 
the symbol DRRA since August 14, 1996.  The following table sets forth, for 
the periods indicated, the low

                                        -18-
<PAGE>

and high closing sale prices for the Class A Common Stock as reported on the 
Nasdaq National Market:

                         Low       High
1996                   ------     ------                                     
Third Quarter              17     19 3/4
Fourth Quarter         18 3/4     27 3/4

1997                                                        
First Quarter          23 1/8         27
Second Quarter         22 1/2     28 3/4
Third Quarter              27     33 3/8
Fourth Quarter         23 7/8         35



ITEM 6.   SELECTED FINANCIAL DATA

     The selected consolidated financial data for the Company presented below 
for, and as of the end of each of the years in the five-year period ended 
December 31, 1997, is derived from Dura Automotive Systems, Inc.'s 
Consolidated Financial Statements which have been audited by Arthur Andersen 
LLP, independent accountants.  The consolidated financial statements at 
December 31, 1996 and 1997 and for each of the three years in the period 
ended December 31, 1997 and the auditor's report thereon are included 
elsewhere in this report.  The consolidated financial statements at and for 
the years ended December 31, 1993, 1994 and 1995 are not included herein.  
This selected consolidated financial data should be read in conjunction with 
"Management's Discussion and Analysis of Results of Operations and Financial 
Condition" and the Company's Consolidated Financial Statements and Notes to 
Consolidated Financial Statements, included elsewhere in this report.

<TABLE>
<CAPTION>
                                                                                                                                 
                                                             YEARS ENDED DECEMBER 31,
                                       ---------------------------------------------------------------------
                                          1993           1994          1995           1996           1997
                                       ---------      ---------      ---------      ---------      ---------
<S>                                    <C>            <C>            <C>            <C>            <C>
INCOME STATEMENT DATA:                                                                  
Revenues                               $ 129,328      $ 189,675      $ 253,726      $ 245,329      $ 449,111
Cost of sales                            116,611        170,625        219,559        207,810        375,086
S, G & A expense                           8,643         10,485         15,513         17,157         32,815
Amortization expense                         487            690          1,094          1,036          3,600
Operating income                           3,587          7,875         17,560         19,326         37,610
Interest expense                           1,533          3,473          4,822          2,589          9,298
Gain on sale of window
   regulator business                          -              -         (4,240)             -              -
Provision for income taxes                   936          1,822          6,852          6,609         11,670
Net income                                 1,118          2,580         10,126         10,128         16,642
                                       ---------      ---------      ---------      ---------      ---------
Basic earnings per share               $    0.41      $    0.75      $    2.04      $    1.57      $    1.89
Diluted earnings per share             $    0.41      $    0.75      $    2.03      $    1.57      $    1.88

</TABLE>

                                Dec. 31,          Dec. 31, 
                                  1996              1997
                               ---------         ---------
BALANCE SHEET DATA:                                             
Working capital                $  27,528         $  50,304      
Total assets                     246,129           419,264      
Long-term debt                    77,376           178,081      
Stockholders' investment          87,367           101,708      
                                                               


                                        -19-
<PAGE>

ITEM 7.   MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS AND
          FINANCIAL CONDITION

     This discussion should be read in conjunction with the Company's
Consolidated Financial Statements and the Notes to Consolidated Financial
Statements included elsewhere in this report.

GENERAL

     The Company ordinarily begins working on products awarded for new or 
redesigned models two to five years prior to the marketing of such models to 
the public.  During such period, the Company incurs (i) costs related to the 
design and engineering of such product, (ii) costs related to the production 
of the tools and dies used to manufacture the new product and (iii) start-up 
costs associated with the initial production of such product.  In general, 
design and engineering costs are expensed in the period incurred unless they 
are reimbursed by the customer, in which case they are capitalized and 
amortized over the life of such product as they are recovered from the 
customer.  Costs incurred in the production of the tools and dies are 
generally capitalized and reimbursed by the customer prior to production. 
Start-up costs, which are generally incurred 30 to 60 days immediately prior 
to and immediately after initial production, are expensed as incurred.

COMPARISON OF YEAR ENDED DECEMBER 31, 1997 TO YEAR ENDED DECEMBER 31, 1996

REVENUES

     Revenues for 1997 increased by $203.8 million, or 83.1%, to $449.1 
million from $245.3 million for 1996.  Approximately $179.0 million of the 
increase relates to the acquisitions of KPI Automotive Group ("KPI") in 
December 1996, the VOFA Group ("VOFA") in January 1997 and GT Automotive 
Systems, Inc. ("GT Automotive") in August 1997.  The remaining increase is 
due to increased production on models served by the Company and new program 
awards.

COST OF SALES

     Cost of sales for 1997 increased by $167.3 million, or 80.5%, to $375.1 
million from $207.8 million for 1996.  As a percentage of revenues, cost of 
sales decreased to 83.5% for 1997 from 84.7% for 1996, resulting in an 
improved gross margin of 16.5% from 15.3% in the preceding year.  The higher 
margins are a result of continued cost reduction efforts, including 
manufacturing process improvements such as cellular manufacturing, mistake 
proofing, improved capacity utilization through rationalization and 
consolidation of facilities and the effects of material cost reductions 
achieved through the centralization of purchasing efforts and the resulting 
greater purchasing power.

SELLING, GENERAL AND ADMINISTRATIVE EXPENSES

     Selling, general and administrative expenses increased by $15.7 million, 
or 91.3%, to $32.8 million for 1997 from $17.2 million for 1996.  This
increase is due to incremental costs from the acquisitions of KPI, VOFA and 
GT Automotive, engineering costs related to new business and costs associated 
with the greater involvement in the design, engineering and prototyping of 
systems for customers.  As a percentage of revenues, selling, general and 
administrative expenses were 7.3% for 1997 compared to 7.0% for 1996.

                                        -20-
<PAGE>

INTEREST EXPENSE

     Interest expense for 1997 increased by $6.7 million to $9.3 million from 
$2.6 million for 1996.  The increase was due principally to borrowings 
incurred related to the acquisitions of KPI, VOFA and GT Automotive.

INCOME TAXES

     The effective income tax rate for 1997 was 41.2% for 1997 compared to 
39.5% for 1996.  The effective rates differed from the statutory rates 
primarily as a result of an increased proportion of the Company's earnings 
being derived in higher tax rate jurisdictions, such as Germany and Canada, 
state taxes and an increase in non-deductible goodwill amortization.
     
COMPARISON OF YEAR ENDED DECEMBER 31, 1996 TO YEAR ENDED DECEMBER 31, 1995

REVENUES

     Revenues for 1996 decreased by $8.4 million, or 3.3%, to $245.3 million
from $253.7 million for 1995.  The decrease was due to the divestiture of the
window regulator business to Rockwell International Corporation in April 1995,
which represented a decrease of approximately $14.1 million, and the effects of
the 1996 General Motors strikes, which adversely impacted the Company's
operations by approximately $4.5 million.  These decreases were offset by
incremental new business, including the benefits of the Chrysler mini-van
tailgate latch replacement program, and the effects of the December 1996
acquisition of KPI.

COST OF SALES

     Cost of sales for 1996 decreased by $11.8 million, or 5.4%, to $207.8
million from $219.6 million in 1995.  As a percentage of revenues, cost of sales
decreased to 84.7% for 1996 from 86.5% for 1995, resulting in an improved gross
margin of 15.3% from 13.5% in the preceding year.  The improvement in gross
margin is a result of (i) the divestiture of the window regulator business,
which had lower margins, (ii) the Company's cost reduction efforts, which
included the implementation of more flexible cellular manufacturing methods,
(iii) the closing of an underutilized facility, and (iv) improved margins on
various replacement business as a result of the Company's advanced engineering
process.

SELLING, GENERAL AND ADMINISTRATIVE EXPENSES

     Selling, general and administrative expenses increased by $1.7 million, or
11.0%, to $17.2 million for 1996 from $15.5 million for 1995.  The increased
expenses were primarily a result of costs incurred as a result of providing a
greater level of design and engineering services to the Company's customers.  As
a percentage of revenues, selling, general and administrative expenses increased
to 7.0% for 1996 from 6.1% for 1995, primarily as a result of the increased
costs incurred in providing a greater level of design and engineering services
to customers and the increased expenses related to the KPI acquisition.

                                        -21-
<PAGE>


INTEREST EXPENSE

     Interest expense for 1996 decreased by $2.2 million, or 45.8%, to $2.6 
million from $4.8 million for 1995.  The decrease was primarily due to the 
repayment of debt with the net proceeds from the sale of the window regulator 
business in April 1995 and the 1996 initial public offering of 3,795,000 
shares of Class A common stock.

INCOME TAXES

     The effective income tax rate for 1996 was 39.5% compared to 40.4% for 
1995.  The effective rates were higher than federal statutory rates primarily 
as a result of state income taxes and nondeductible goodwill amortization.

LIQUIDITY AND CAPITAL RESOURCES

     On August 14, 1996, the Company completed the IPO of 3,795,000 shares of 
its Class A Common Stock at a price of $14.50 per share. The Company realized 
net proceeds of approximately $50.0 million from such offering.

     The Company's principal source of funds has been, and is anticipated to 
continue to be, its cash flows from operations. During 1997, the Company 
generated $30.5 million from operations, before the effects of changes in 
working capital, compared to $19.0 million in 1996. The cash generated from 
operations combined with borrowings under the Company's Bank Credit Agreement 
were used to fund capital expenditures of $16.2 million, to provide working 
capital and to finance the acquisitions of KPI, VOFA and GT Automotive.

     The Bank Credit Agreement consists of a revolving credit facility 
providing for borrowings of up to $200.0 million. Borrowings under the Bank 
Credit Agreement are secured by substantially all of the Company's assets and 
guaranteed by the Parent. The Bank Credit Agreement provides the Company with 
the ability to denominate a portion of its borrowings in foreign currencies 
up to an amount equal to $50.0 million. As of December 31, 1997, the Company 
had outstanding borrowings under the Bank Credit Agreement of approximately 
$165.2 million (of which approximately $2.8 million were denominated in 
Canadian dollars and approximately $3.6 million were denominated in Deutsche 
Marks). The Bank Credit Agreement requires the Company to pay a facility fee 
on the commitment amount of 0.25% and contains various restrictive covenants, 
which, among other things, require the Company to maintain certain financial 
ratios, including minimum liquidity and interest coverage.

     The Company estimates that it will fund approximately $19.0 million in 
capital expenditures in 1998.  These capital expenditures will be used 
primarily for the purchase of machinery and equipment to support new business 
awards, as well as to finance continued cost reduction efforts.

                                        -22-
<PAGE>

     The Company believes that funds available under its bank credit 
agreement, together with funds generated by the Company's operations, will 
provide the Company with sufficient liquidity and capital resources for 
working capital, capital expenditures and other needs.  However, any 
significant acquisitions may require additional debt or equity financing.  
The Company believes additional financing will be available from bank 
lenders, through the issuance of public or private debt securities or through 
the additional public offerings of equity securities.

QUARTERLY RESULTS OF OPERATIONS AND SEASONALITY

     The Company typically experiences decreased revenues and operating 
income during the third calendar quarter of each year due to production 
shutdowns at OEMs for model changeovers and vacations.

EFFECTS OF INFLATION

     Inflation potentially affects the Company in two principal ways. First, 
a portion of the Company's debt is tied to prevailing short-term interest 
rates which may change as a result of inflation rates, translating into 
changes in interest expense. Second, general inflation can impact material 
purchases, labor and other costs. In many cases, the Company has limited 
ability to pass through inflation-related cost increases due to the 
competitive nature of the markets that the Company serves. In the past few 
years, however, inflation has not been a significant factor for the Company.

FOREIGN CURRENCY TRANSACTIONS

     A significant portion of the Company's revenues during 1997 were derived 
from manufacturing operations in Europe, Latin America and Canada.  The 
results of operations and financial position of the Company's operations in 
these countries are principally measured in their respective currency and 
translated into U.S. dollars.  The effects of foreign currency fluctuations 
in such countries are somewhat mitigated by the fact that expenses are 
generally incurred in the same currencies in which revenues are generated. 
The reported income of these subsidiaries will be higher or lower depending 
on a weakening or strengthening of the U.S. dollar against the respective 
foreign currency.

     A significant portion of the Company's assets at December 31, 1997 are 
based in its foreign operations and are translated into U.S. dollars at 
foreign currency exchange rates in effect as of the end of each period, with 
the effect of such translation reflected as a separate component of 
stockholders' investment.  Accordingly, the Company's consolidated 
stockholders' investment will fluctuate depending upon the weakening or 
strengthening of the U.S. dollar against the respective foreign currency.

     The Company's strategy for management of currency risk relies primarily 
upon conducting its operations in such countries' respective currency and 
may, from time to time, engage in hedging programs intended to reduce the 
Company exposure to currency fluctuations.

YEAR 2000

     The Company is in the process of replacing and upgrading its computer 
systems, which, among other things, will accommodate the year 2000. The 
Company currently expects its computer systems to be fully operational prior 
to the year 2000 so as not to adversely effects its operations.  During 1998 
and 1999, the Company expects to incur costs of approximately $1.0 million and 
$1.5 million, respectively, to make these replacements and upgrades.  Failure 
of the Company to make required modifications on a timely basis or the 

                                        -23-
<PAGE>

inability of other companies with which the Company does business to complete 
their year 2000 modifications on a timely basis, could adversely effect the 
Company's operations.

RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS

     During June 1997, the Financial Accounting Standards Board released SFAS 
No. 130, "Reporting Comprehensive Income", effective for fiscal years 
beginning after December 15, 1997. SFAS No. 130 establishes standards for 
reporting and display in the financial statements of total net income and the 
components of all other nonowner changes in equity, referred to as 
comprehensive income. The Company will adopt SFAS No. 130 in 1998 and is 
currently analyzing the impact it will have on the disclosures in the 
financial statements.

     During June 1997, the Financial Accounting Standards Board released SFAS 
No. 131, "Disclosures about Segments of an Enterprise and Related 
Information", effective for fiscal years beginning after December 15, 1997. 
SFAS No. 131 requires disclosure of business and geographic segments in the 
consolidated financial statements of the Company. The Company will adopt SFAS 
No. 131 in 1998 and is currently analyzing the impact it will have on the 
disclosures in its financial statements.

ITEM 8.   FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

     The consolidated financial statements of the Company are hereby 
incorporated by reference to Exhibit 99.1, which is being filed with this 
report.

ITEM 9.   CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
          FINANCIAL DISCLOSURE

     None.

                                      PART III

ITEM 10.  DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

     A.   DIRECTORS OF THE REGISTRANT

     The information required by Item 10 with respect to the directors is
incorporated herein by reference to the section labeled "Election of Directors"
which appears in the Company's 1998 Proxy Statement.

     B.   EXECUTIVE OFFICERS

     The following table sets forth certain information with respect to the
Company's executive officers as of December 31, 1997:

<TABLE>
<CAPTION>

     NAME                  AGE                   POSITION(S)
     ----                  ---                   -----------
<S>                        <C>             <C>
S.A. Johnson                57             Chairman and Director
Karl F. Storrie             60             President, Chief Executive Officer and 
                                              Director
David R. Bovee              48             Vice President
Joe A. Bubenzer             46             Senior Vice President
Stephen E.K. Graham         40             Vice President and Chief Financial Officer
Robert R. Hibbs             35             Vice President and Director
John J. Knappenberger       51             Vice President
Milton D. Kniss             50             Vice President
Scott D. Rued               41             Vice President

</TABLE>

     S.A. JOHNSON has served as Chairman and a Director of the Company since
November 1990.  Mr. Johnson is the founder, Chief Executive Officer and
President of Hidden Creek, a private industrial management company based in
Minneapolis, Minnesota, which has provided certain management and other services
to the Company.  Mr. Johnson is also the President of J2R Corporation (J2R). 
Prior to forming Hidden Creek, Mr. Johnson served from 1985 to 1989 as Chief
Operating Officer of Pentair, Inc., a diversified industrial company.  From 1981
to 1985, Mr. Johnson was President and Chief Executive Officer of Onan Corp., a
diversified manufacturer of electrical generating equipment and engines for
commercial, defense and industrial markets.  Mr. Johnson served as Chairman and
a director of Automotive Industries 

                                        -24-
<PAGE>

Holding, Inc., a supplier of interior trim components to the automotive 
industry, from May 1990 until its sale to Lear Corporation in August 1995.  
Mr. Johnson is also Chairman and a director of Tower Automotive, Inc., a 
manufacturer of engineered metal stampings and assemblies for the automotive 
industry.

     KARL F. STORRIE has served as President, Chief Executive Officer and a 
Director of the Company since March 1991.  Prior to joining the Company and 
from 1986, Mr. Storrie was Group President of a number of aerospace 
manufacturing companies owned by Coltec Industries, a multi-divisional public 
corporation. Prior to becoming a Group President, Mr. Storrie was a Division 
President of two aerospace design and manufacturing companies for Coltec 
Industries from 1981 to 1986.  During his thirty-five year career, Mr. 
Storrie has held a variety of positions in technical and operations 
management.  Mr. Storrie is also a director of Argo-Tech Corporation, a 
manufacturer of aircraft fuel, boost and transfer pumps.

     DAVID R. BOVEE has served as Vice President since November 1990 and 
Chief Financial Officer of the Company from November 1990 to May 1997.  Mr. 
Bovee also serves as Assistant Secretary for the Company.  Prior to joining 
the Company, Mr. Bovee served as Vice President at Wickes in its Automotive 
Group from 1987 to 1990.

     JOE A. BUBENZER has had responsibility for European operation since June 
1997.  From October 1993 to May 1997 Mr. Bubenzer served as Vice President 
Sales/Engineering and was named Senior Vice President in 1995.  Prior to 
joining the Company in October 1993, Mr. Bubenzer filled various executive 
positions with ITT Automotive, a supplier of components to the automotive 
industry, where he worked for six years, and, prior to such time, at GM, 
where he worked for 14 years.

     STEPHEN E.K. GRAHAM has served as Vice President and Chief Financial 
Officer since joining the Company in June 1997.  From 1996 to May 1997, Mr. 
Graham was Chief Financial Officer of Cambridge Industries, Inc., a North 
American supplier of components to the automotive industry.  From 1994 to 
1996, Mr. Graham was Chief Financial Officer of Truck Components, Inc., a 
supplier of components to the automotive and heavy truck industry.  From 1989 
to 1994, Mr. Graham held several positions with Magna International, Inc., an 
automotive components supplier.

     ROBERT R. HIBBS has served as a Director of the Company since August 
1994 and as Vice President since November 1990.  Mr. Hibbs, a stockholder of 
J2R, has also served as Vice President-Corporate Development of Hidden Creek 
since January 1994 and as a Director from April 1990 through December 1993.  
Prior thereto, Mr. Hibbs worked in the corporate finance area with Drexel 
Burnham Lambert, an investment banking firm, in New York from 1988 to 1990.

     JOHN J. KNAPPENBERGER has served as Vice President of Quality and 
Materials of the Company since December 1995.  Prior to joining the Company, 
Mr. Knappenberger was Director of Quality for Carrier Corporation's North 
American Operations, manufacturers of heating and air conditioning systems, 
from February 1992.  From 1985 to 1991, Mr. Knappenberger was employed by TRW 
Inc., a supplier of components to the automotive industry, beginning as 
Director of Quality in 1985 for the Steering and Suspension Division and 
becoming Vice President, Quality for the Automotive Sector in 1990.

     MILTON D. KNISS has served as Vice President of Operations of the Company
since January 1994 and added responsibility for Sales/Engineering in June 1997. 
From April 1991 

                                        -25-
<PAGE>

until January 1994, Mr. Kniss served as Director of Michigan Operations for 
the Company.  Mr. Kniss joined the predecessor in 1981 as a Divisional 
Purchasing Manager, served as Plant Manager of East Jordan, Michigan from 
1982 until 1986, and Plant Manager of Gordonsville, Tennessee until 1991.

     SCOTT D. RUED has served as Vice President of the Company since November 
1990.  Mr. Rued, a stockholder of J2R, has also served as Executive Vice 
President and Chief Financial Officer of Hidden Creek since January 1994 and 
served as it Vice President Finance and Corporate Development from June 1989 
through 1993.  Mr. Rued has served as Vice President, Corporate Development 
and a director of Tower Automotive, Inc. since April 1993.  Mr. Rued served 
as Vice President, Chief Financial Officer and a director of Automotive 
Industries Holding, Inc. from April 1990 until its sale to Lear Corporation 
in August 1995. Mr. Rued is also a director of The Rottlund Company, Inc., a 
corporation engaged in the development and sale of residential real estate.

     C.   SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE

     The information required by Item 10 with respect to compliance with 
reporting requirements is incorporated herein by reference to the section 
labeled "Section 16(a) Beneficial Ownership Reporting Compliance" which 
appears in the Company's 1998 Proxy Statement.

ITEM 11.  EXECUTIVE COMPENSATION

     The information required by Item 11 is incorporated herein by reference to
the sections labeled "Compensation of Directors" and "Executive Compensation"
which appear in the Company's 1998 Proxy Statement.

ITEM 12.  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

     The information required by Item 12 is incorporated herein by reference to
the section labeled "Security Ownership" which appears in the Company's 1998
Proxy Statement.

ITEM 13.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

     The information required by Item 13 is incorporated herein by reference to
the section labeled "Certain Relationships and Related Transactions" which
appears in the Company's 1998 Proxy Statement.

                                      PART IV

ITEM 14.  EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K

     (a)  DOCUMENTS FILED AS PART OF THIS REPORT

          The following documents are filed as a part of this Form 10-K:

          (1)  FINANCIAL STATEMENTS:

               -    Report of Independent Public Accountants
               -    Consolidated Balance Sheets as of  December 31, 1996 and
                    1997

                                        -26-
<PAGE>

               -    Consolidated Statements of Operations for the Years Ended 
                    December 31, 1995, 1996 and 1997
               -    Consolidated Statements of Stockholders' Investment for the
                    Years Ended December 31, 1995, 1996 and 1997
               -    Consolidated Statements of Cash Flows for the Years Ended
                    December 31, 1995, 1996 and 1997
               -    Notes to Consolidated Financial Statements

          (2)  EXHIBITS:  See "Exhibit Index" beginning on page 29.

     (b)  REPORTS ON FORM 8-K

                    None.

                                        -27-
<PAGE>


                              SIGNATURES

     Pursuant to the requirements of Section 13 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.

                                        DURA AUTOMOTIVE SYSTEMS, INC.

Date:  February 26, 1998                By /s/ S. A. JOHNSON  
                                           ---------------------------
                                           S. A. Johnson, Chairman

     Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons on behalf of the
Registrant and in the capacities and on the dates indicated.

<TABLE>
<CAPTION>

SIGNATURE                                TITLE                          DATE
---------                                -----                          ----
<S>                             <C>                               <C>
                                                         
/S/ S. A. JOHNSON               Chairman and Director             February 26, 1998
----------------------------
S. A. Johnson                                                         
                                                         
/S/ KARL F. STORRIE             President, Chief Executive        February 26, 1998
----------------------------      Officer (Principal Executive 
Karl F. Storrie                   Officer) and Director        
                                  
/S/ ROBERT R. HIBBS             Vice President and                February 26, 1998
----------------------------      Director
Robert R. Hibbs                   
                                                                
/S/ NEIL C. ANDERSON            Director                          February 26, 1998
----------------------------
Neil C. Anderson
                                                         
/S/ ROBERT E. BROOKER, JR.      Director                          February 26, 1998
----------------------------
Robert E. Brooker, Jr.
                                                         
/S/ W.H. CLEMENT                Director                          February 26, 1998
----------------------------
W.H. Clement
                                                         
/S/ JACK K. EDWARDS             Director                          February 26, 1998
----------------------------
Jack K. Edwards
                                                         
/S/ JAMES O'LOUGHLIN            Director                          February 26, 1998
----------------------------
James O'Loughlin
                                                         
/S/ WILLIAM L. ORSCHELN         Director                          February 26, 1998
----------------------------
William L. Orscheln
                                                         
/S/ ERIC J. ROSEN               Director                          February 26, 1998
----------------------------
Eric J. Rosen
                                                         
/S/ BARBARA A. WESTHUES         Director                          February 26, 1998
----------------------------
Barbara A. Westhues
                                                         
/S/ STEPHEN E.K. GRAHAM         Vice President and Chief          February 26, 1998
----------------------------    Financial Officer (Principal 
Stephen E.K. Graham             Accounting Officer)          
                                
</TABLE>

                                      -28-