<PAGE>   1
                                  UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                    FORM 10-Q

(Mark One)
[X]  QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
     EXCHANGE ACT OF 1934

                  For the quarterly period ended June 30, 2000

     OR

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

                   For the transition period from _______ to
                         Commission file number 1-13516
                                                -------

                      UNIVERSAL AUTOMOTIVE INDUSTRIES, INC.
             ------------------------------------------------------
             (Exact name of registrant as specified in its charter)

                 Delaware                                  36-3973627
     ----------------------------------------------------------------------
     (State or other jurisdiction of                    (I.R.S. Employer
     incorporation or organization)                     Identification No.)

                           11859 South Central Avenue
                              Alsip, Illinois 60803
                              ---------------------
                    (Address of principal executive offices)
                                   (Zip Code)

                                 (708) 293-4050
                                 --------------
              (Registrant's telephone number, including area code)

                                       N/A
                                       ---
              (Former name, former address and former fiscal year,
                         if changed since last report)

     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
                                             ---   ---

               APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY
                  PROCEEDINGS DURING THE PRECEDING FIVE YEARS:

     Indicate by check mark whether the registrant has filed all documents and
reports required to be filed by Sections 12, 13 or 15(d) of the Securities
Exchange Act of 1934 subsequent to the distribution of securities under a plan
confirmed by a court. Yes    No
                         ---   ---

                      APPLICABLE ONLY TO CORPORATE ISSUERS:

The number of shares of issuer's Common Stock, par value $.01 per share,
outstanding as of August 11, 2000 was 6,914,310 shares.


<PAGE>   2
                      UNIVERSAL AUTOMOTIVE INDUSTRIES, INC.

                                      INDEX

PART I.  FINANCIAL INFORMATION
                                                                        Page (s)
                                                                        --------

   Item 1. Financial Statements

         Consolidated Balance Sheets
               June 30, 2000 (Unaudited) and December 31, 1999            3

         Consolidated Statements of Operations
               (Unaudited) - for the three months and six months ended
               June 30, 2000 and 1999                                     4

         Consolidated Statements of Cash Flows
               (Unaudited) - for the six months ended
               June 30, 2000 and 1999                                     5 - 6

         Notes to Condensed Financial Statements (Unaudited)              7 - 8

   Item 2. Management's Discussion and Analysis of Results of
           Operations and Financial Condition                             9 - 11

   Item 3.  Quantitative and Qualitative Disclosure About Market Risk     12


PART II.  OTHER INFORMATION

   Items 1 through 3 and 5 are not applicable to this report.
   Item 4 - Submission of Matters to a Vote of Security Holders           12

   Item 6 - Exhibits and Reports on Form 8-K                              12

   Signatures                                                             13

   EXHIBIT II - Computation of Earnings Per Share                         14




                                       2
<PAGE>   3
                     UNIVERSAL AUTOMOTIVE INDUSTRIES, INC.
                          CONSOLIDATED BALANCE SHEETS

<TABLE>
<CAPTION>
                                                                      June 30, 2000    December 31, 1999
                                                                      -------------    -----------------
        Assets                                                         (Unaudited)
<S>                                                                    <C>                <C>
Current Assets:
   Cash                                                                $   143,586        $    35,457
   Accounts receivable, trade                                           22,304,941         15,849,708
   Due from stockholders                                                   237,262            237,262
   Inventories                                                          17,830,328         17,938,629
   Deferred income taxes                                                   259,100            395,000
   Prepaid expenses and other current assets                               997,070          1,060,650
   Net current assets of discontinued operation                            242,694            339,535
                                                                       -----------        -----------
                                                                        42,014,981         35,856,241
                                                                       -----------        -----------
Property and Equipment - continuing operations, net                      5,093,434          4,758,305
                                                                       -----------        -----------
Property and Equipment - discontinued operation, net                       800,000            800,000
                                                                       -----------        -----------
Other Assets:
   Goodwill, net                                                           560,032            569,073
   Deferred income taxes                                                   490,000            490,000
   Other assets                                                            933,492            686,148
                                                                       -----------        -----------
                                                                         1,983,524          1,745,221
                                                                       -----------        -----------
                                                                       $49,891,939        $43,159,767
                                                                       -----------        -----------
   Liabilities and Stockholders' Equity
Current Liabilities:
   Accounts payable, trade                                             $12,601,169        $10,691,507
   Long-term indebtedness, current portion                                 325,141            508,955
   Accrued expenses and other current liabilities                        4,869,311          4,668,252
   Estimated loss on disposal of discontinued operation                  1,145,796          1,500,000
                                                                       -----------        -----------
                                                                        18,941,417         17,368,714
                                                                       -----------        -----------
Long-term Liabilities:
   Revolving loan indebtedness                                          21,281,079         16,764,671
   Subordinated debenture                                                4,408,125          4,385,625
   Long-term indebtedness, non-current portion                           1,193,148          1,308,847
   Deferred income taxes                                                   253,066            258,734
                                                                       -----------        -----------
                                                                        27,135,418         22,717,877
                                                                       -----------        -----------
 Minority interest in subsidiary                                           450,000                  0
                                                                       -----------        -----------
Stockholders' Equity:
   Preferred stock (authorized 1,000,000 shares,  $.01 par
   value, none issued or outstanding)                                            0                  0
   Common stock (authorized 15,000,000 shares, $.01 par value,
   6,914,310 shares and 6,829,310 issued and outstanding at
   June 30, 2000 and December 31, 1999, respectively)                       69,143             68,293
   Additional paid-in-capital                                            8,553,428          8,413,978
   Retained earnings                                                    (4,336,605)        (4,514,672)
   Accumulated other comprehensive losses                                 (920,862)         ( 894,423)
                                                                       -----------        -----------
                                                                         3,365,104          3,073,176
                                                                       -----------        -----------
                                                                       $49,891,939        $43,159,767
                                                                       ===========        ===========
</TABLE>

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


                                       3
<PAGE>   4
                     UNIVERSAL AUTOMOTIVE INDUSTRIES, INC.
                     CONSOLIDATED STATEMENTS OF OPERATIONS
                                  (UNAUDITED)

<TABLE>
<CAPTION>
                                                        Three Months Ended June 30,      Six Months Ended June 30,
                                                        ---------------------------     ---------------------------
                                                           2000            1999            2000            1999
                                                           ----            ----            ----            ----
<S>                                                     <C>             <C>             <C>             <C>
Net sales                                               $19,995,593     $19,478,617     $37,498,197     $33,377,295
Cost of sales                                            15,615,604      15,192,851      29,429,709      26,639,306
                                                        -----------     -----------     -----------     -----------
Gross profit                                              4,379,989       4,285,766       8,068,488       6,737,989
Selling, general, and administrative expenses             3,500,341       2,876,778       6,588,001       5,279,379
                                                        -----------     -----------     -----------     -----------
Income from operations                                      879,648       1,408,988       1,480,487       1,458,610
                                                        -----------     -----------     -----------     -----------
Other (Income) Expense:
   Interest expense                                         674,176         481,100       1,251,630         940,380
   Other                                                    (19,186)        (10,929)        (85,111)        (11,523)
                                                        -----------     -----------     -----------     -----------
                                                            654,990         470,171       1,166,519         928,857
                                                        -----------     -----------     -----------     -----------

Income before provision for income taxes                    224,658         938,818         313,968         529,754
Income tax provision                                        103,600         331,018         135,900         135,500
                                                        -----------     -----------     -----------     -----------
Income from continuing operations                           121,058         607,800         178,068         394,254
Loss from discontinued operation                                  -        (215,641)              -        (587,249)
                                                        -----------     -----------     -----------     -----------
Net income (loss)                                       $   121,058     $   392,159     $   178,068     $  (192,995)
                                                        ===========     ===========     ===========     ===========
Comprehensive Income (Loss):
   Net income (loss)                                    $   121,058     $   392,159     $   178,068     $  (192,995)
   Other comprehensive loss, foreign currency
   translation adjustment                                   (41,169)        (24,102)        (26,439)        (56,956)
                                                        -----------     -----------     -----------     -----------
Comprehensive Income (Loss)                             $    79,889     $   368,057     $   151,629     $  (249,951)
                                                        ===========     ===========     ===========     ===========
Earnings (Loss) Per Share:
Basic:
   Continuing operations                                $      0.02     $      0.09     $      0.03     $      0.06
   Discontinued operation                                      0.00           (0.03)           0.00           (0.09)
                                                        -----------     -----------     -----------     -----------
   Net                                                  $      0.02     $      0.06     $      0.03     $     (0.03)
                                                        ===========     ===========     ===========     ===========
Diluted:
   Continuing operations                                $      0.02     $      0.08     $      0.02     $      0.05
   Discontinued operation                                      0.00           (0.03)           0.00           (0.08)
                                                        -----------     -----------     -----------     -----------
   Net                                                  $      0.02     $      0.05     $      0.02     $     (0.03)
                                                        ===========     ===========     ===========     ===========
Weighted average number of common shares Outstanding:
   Basic                                                  6,914,310       6,784,810       6,876,810       6,778,229
   Common stock equivalents resulting from
warrants and options                                        599,201         356,398         815,198         376,591
                                                        -----------     -----------     -----------     -----------
   Diluted                                                7,513,511       7,141,208       7,692,008       7,154,820
                                                        ===========     ===========     ===========     ===========
</TABLE>



    The accompanying notes are an integral part of the financial statements


                                       4
<PAGE>   5
                     UNIVERSAL AUTOMOTIVE INDUSTRIES, INC.
                     CONSOLIDATED STATEMENTS OF CASH FLOWS
                                  (UNAUDITED)

<TABLE>
<CAPTION>
                                                                              Six Months Ended June 30,
                                                                          -----------------------------------
                                                                             2000                    1999
                                                                          -----------             -----------
<S>                                                                       <C>                     <C>
Cash Flows from Operating Activities:                                     $   178,068             $  (192,995)
   Net Income (Loss)                                                                -                (587,249)
   Net loss from discontinued operations                                  -----------             -----------
Income from continuing operations                                             178,068                 394,254

Adjustments to reconcile net income (loss) to net cash used
in operating activities:
   Depreciation and amortization                                              616,455                 469,690

Provision for bad debts                                                       200,813                 251,659
   Effect of exchange rate changes                                            (26,439)                (56,956)
   Compensation expense for stock options                                      19,800                  19,800
   Deferred income taxes and other                                            152,732                  12,088
   Changes in operating assets and liabilities:
      Accounts receivable, trade                                           (6,656,046)             (7,816,469)
      Inventories                                                             108,301               1,893,710
      Prepaid expenses and other current assets                                63,580                 (39,304)
      Other assets                                                           (358,859)                      0
      Accounts payable, trade                                               1,909,660               2,142,336
      Accrued expenses and other current liabilities                          201,059                 (72,942)
                                                                          -----------             -----------
   Net cash used in operating activities from
      continuing operations                                                (3,590,876)             (2,802,134)
   Net cash used in operating activities from
      discontinued operations                                                (257,363)               (357,827)
                                                                          -----------             -----------
      Net cash used in operating activities                                (3,848,239)             (3,159,961)
                                                                          -----------             -----------


Cash Flows for Investing Activities - purchase of
property and equipment                                                       (831,026)               (839,033)
                                                                          -----------             -----------
Cash Flows from Financing Activities:
Net increase in revolving loan indebtedness                                 4,516,406               3,705,000
Proceeds from notes payable                                                         -                 262,126
Proceeds from issuance of preferred stock of subsidiary                       450,000                       0
Principal payments on notes payable                                          (299,513)               (215,899)
Proceeds from issuance of common stock from exercise of options               120,500                       -
   Net cash provided by financing activities                              -----------             -----------
                                                                            4,787,393               3,751,227
                                                                          -----------             -----------
Net Increase (Decrease) in Cash                                               108,128                (247,767)
Cash, Beginning of Period                                                      35,457                 347,626
                                                                          -----------             -----------
Cash, End of Period                                                       $   143,586             $    99,859
                                                                          ===========             ===========

Cash of continuing operations                                             $   143,586             $       104
Cash of discontinued operations (included with
   net current assets of discontinued operations)                                   -                  99,755
                                                                          -----------             -----------
                                                                          $   143,586             $    99,859
                                                                          ===========             ===========
</TABLE>



                                       5
<PAGE>   6
                     UNIVERSAL AUTOMOTIVE INDUSTRIES, INC.
                     CONSOLIDATED STATEMENTS OF CASH FLOWS
                                  (UNAUDITED)

<TABLE>
<CAPTION>
                                                                    Three Months Ended June 30,
                                                                  -------------------------------
                                                                       2000              1999
                                                                  --------------     ------------
<S>                                                               <C>                <C>
Supplemental Disclosures of Cash Flow Information:

   Cash paid for interest                                         $    1,265,821     $  1,107,256
                                                                  --------------     ------------
   Cash paid for income taxes                                     $       15,000     $          0
                                                                  --------------     ------------
Supplemental Disclosures of Noncash Investing and Financing
Activities - Issuance of common stock for services                $            0     $     25,000
                                                                  --------------     ------------
</TABLE>

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




                                       6
<PAGE>   7
                      UNIVERSAL AUTOMOTIVE INDUSTRIES, INC.
                     NOTES TO CONDENSED FINANCIAL STATEMENTS
                                   (UNAUDITED)

1.   UNAUDITED INTERIM FINANCIAL STATEMENTS
Interim condensed financial statements are prepared pursuant to the requirements
for reporting on Form 10-Q. Accordingly, certain disclosures accompanying annual
financial statements prepared in accordance with generally accepted accounting
principles are omitted. For additional disclosures, see the Notes to
Consolidated Financial Statements contained in Universal Automotive Industries,
Inc. (the "Company") Annual Report on Form 10-K for the year ended December 31,
1999.

In the opinion of management of the Company, all adjustments, consisting solely
of normal recurring adjustments, necessary for the fair presentation of the
financial statements for these interim periods have been included. The current
period's results of operations are not necessarily indicative of results which
ultimately may be achieved for the year.

2.   INVENTORIES
                                   June 30, 2000
                                   -------------
     Finished goods                $  15,069,210
     Work in process                     233,614
     Raw materials                     2,527,504
                                   -------------
                                   $  17,830,328
                                   -------------

3.   BASIS OF PRESENTATION
Income Taxes
The Company's effective tax rate for the three and six months ended June 30,
1999 varies from the federal statutory tax rate principally due to losses in the
Company's Hungarian subsidiary for which no current tax benefits are available.

4.   LASALLE INDEBTEDNESS
The Company entered into an amendment to its credit agreement with LaSalle Bank
National Association or its subsidiaries ("LaSalle") whereby the amount of
available borrowing under the revolving credit was increased $4 million to $26
million.

5.   EXERCISE OF FINOVA WARRANTS
The Company received notification from Finova Mezzanine Capital, Inc. ("Finova")
that they elected to exercise a warrant to purchase 450,000 of the Company's
common stock at an exercise price of $0.83 per share. The warrants are more
fully described in Note 4 to the 1999 audited financial statements. Finova has
elected to use a "cashless" exercise provision whereby Finova will receive a net
of 279,257 shares of common stock after surrendering 170,743 shares which have a
fair market value equal to the aggregate exercise price. Therefore, the Company
will receive no cash proceeds from this transaction when the shares are issued.




                                       7
<PAGE>   8
6.   CAPITALIZATION OF EPARTS EXCHANGE, INC.
Capitalization of eParts eXchange, Inc. is as follows as of June 30, 2000:

<TABLE>
<CAPTION>
-----------------------------------------------------------------------------------------------------------------------
                                                        Shares
                                                        Authorized        Shares Issued       Percent of Shares Issued
-----------------------------------------------------------------------------------------------------------------------
<S>                                                     <C>                  <C>                         <C>
Common, Par $.00001, issued to:                         30,000,000
    Universal Automotive Industries, Inc.                                    7,000,000                   74%
    Officers and directors                                                   2,500,000                   26%
-----------------------------------------------------------------------------------------------------------------------
Preferred, Series A , Par $00001                         7,000,000             900,000
-----------------------------------------------------------------------------------------------------------------------
</TABLE>

The Series A Preferred was issued for total proceeds of $450,000 which is shown
in the Balance Sheet as Minority Interest in Subsidiary. Each share of Series A
Preferred Stock is convertible into one share of Common at any time and has
voting rights, together with the Common Stock, on an "as converted" basis. All
liquidation proceeds accrue to Series A Preferred Stock until Series A holders
receive a return equal to the original investment plus 10%. The Company has
historically sold certain commodity aftermarket parts on a drop ship basis;
effective May 1, 2000, the Company contributed this business to eParts eXchange,
Inc., which is more in line with such subsidiary's commodity auction business
than the Company's core brake parts business.

7.   DISCONTINUED OPERATIONS
As previously disclosed in Note 9 of the 1999 audited financial statements, the
Company finalized its decision to discontinue its Hungarian operation in
December 1999. As of December 31, 1999, the Company provided for estimated costs
of disposition of $1,500,000 including estimated losses of the discontinued
operation during the disposal period. For the three and six months ended June
30, 2000, losses from the discontinued operation of $212,000 and $354,000,
respectively were applied against the aforementioned reserve. The Statements of
Operations for the three and six months ended June 30, 1999 were restated to
reflect this treatment.









                                       8
<PAGE>   9
ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS AND
FINANCIAL CONDITION(1)

GENERAL

     We are a manufacturer and distributor of brake rotors, drums, disc brake
pads, relined brake shoes, non-asbestos friction lining, and a complete line of
hydraulic parts. We believe that we are the leading supplier of "value line"
brake parts (brake parts sold at prices significantly below those of certain
leading national brand name brake parts) to mass-market retailers, traditional
warehouse distributors and specialty undercar distributors in North America.

     Management's discussion and analysis of financial condition and results of
operations that follow are based on restated financial condition and results of
operations for both periods presented due to the treatment of the Company's
Hungarian foundry as a discontinued business.

RESULTS OF OPERATIONS

Three Months Ended June 30, 2000 Compared To Three Months Ended June 30, 1999

     Net sales for the three months ended June 30, 2000 increased $517,000 or
2.7% over the same quarter in 1999 to $19,996,000. Shipments of US brake
products increased $3,445,000 or 22.3% as the Company increased their market
penetration with the addition of new customers in 2000, especially Pep Boys,
Inc., in spite of softness in the North American automotive aftermarket. This
increase was offset, however, by lower commodity sales ($830,000) and the lack
of Canadian distribution business sales ($2,098,000) which was sold as of
December 31, 1999.

     Gross profits for the three months ended June 30, 2000 were $4,380,000 or
21.9% of net sales compared to $4,285,000 or 22.0% in the same period of 1999.
Included in gross profit in the second quarter of 2000 was $114,000 of one-time
costs related to the realignment of the Company's friction manufacturing
facilities. Included in gross profit for the second quarter of 1999 is $485,000
of gross profit related to the Canadian distribution business which was sold as
of December 31, 1999. Before the effects of these two factors, gross profit
related to the Company's base business increased to 22.5% of net sales for the
second quarter of 2000 compared to 21.9% of net sales in the same quarter of
1999. This increase is attributable to improvement in sales mix.


------------------------
(1) Some of the statements included in Management's Discussion and Analysis of
Financial Condition and Results of Operations, may be considered to be "forward
looking statements" since such statements relate to matters which have not yet
occurred. For example, phrases such as "the Company anticipates," "believes" or
"expects" indicate that it is possible that the event anticipated, believed or
expected may not occur. Should such event not occur, then the result which the
Company expected also may not occur or occur in a different manner, which may be
more or less favorable to the Company. The Company does not undertake any
obligation to publicly release the result of any revisions to these forward
looking statements that may be made to reflect any future event or
circumstances.


                                       9
<PAGE>   10
     Selling, general and administrative ("SG&A") expenses for the three months
ended June 30, 2000 increased by $623,000 or 21.7% to $3,500,000 from $2,877,000
for the same period in 1999. Included in SG&A expenses in the second quarter of
2000 was $101,000 of costs related to the start-up of the Company's e-commerce
subsidiary, eParts eXchange, Inc. Included in SG&A expenses for the second
quarter of 1999 are $410,000 of costs related to the Canadian distribution
business which was sold as of December 31, 1999. Before the effects of these two
factors, SG&A expenses related to the Company's base business increased to
$3,399,000 for the second quarter of 2000 compared to $2,467,000 in the same
quarter of 1999. The increase was due primarily to increased freight costs and
additional marketing and sales costs associated with obtaining new brake
business.

     Other expense for the three months ended June 30, 2000 increased to
$655,000 from $470,000 for the same period of 1999. The increase is attributable
to higher interest expense in the second quarter ended June 30, 2000 compared to
the same period of 1999. The increase in interest expense was due primarily to a
higher level of borrowing at June 30, 2000 compared to June 30, 1999 and higher
interest rates.

     The absence of a loss from discontinued operations for the quarter ended
June 30, 2000 is due to the fact that the loss from the discontinued Hungarian
iron foundry operation for the quarter ended June 30, 2000 of $212,000 has been
charged against the reserve for such losses established as of December 31, 1999.

     Net income for the three months ended June 30, 2000 was $121,000 compared
to $392,000 for the same period in 1999. This decrease in net income is
attributed to the individual factors discussed above.

Six Months Ended June 30, 2000 Compared to Six Months Ended June 30, 1999

     Net sales for the six months ended June 30, 2000 increased by $4,121,000 or
12.3% to $37,498,000. Sales of US brake parts for the six months ended June 30,
2000 increased by 35.2% or $9,102,000 over the same 1999 period due primarily to
the addition of a major new customer and increased sales of friction product.
This increase was offset, however, by lower commodity sales ($1,490,000) and the
lack of Canadian distribution business sales ($3,491,000) which was sold as of
December 31, 1999.

     Gross profits for the six months ended June 30, 2000 increased $1,330,000
or 19.7% to $8,068,000 from $6,738,000 for the same period in 1999. Included in
gross profit for the six months ended June 30, 2000 was $353,000 of one-time
costs related to the realignment of the Company's friction manufacturing
facilities. Included in gross profit for the six months ended June 30, 1999 was
$604,000 of gross profit related to the Canadian distribution business which was
sold as of December 31, 1999. Before the effects of these two factors, the gross
profit margin percentage for the six month period for the base business was
22.5% compared to 20.5% for the same 1999 period. Gross profits for the US brake
business for the six months ended June 30, 2000 increased $2,407,000 or 42.0%.
These increases are due to higher sales and a more profitable sales mix.

     Selling, general and administrative expenses for the six months ended June
30, 2000 increased $1,309,000 or 24.8% to $6,588,000 from $5,279,000 for the
same period in 1999. Included in SG&A expenses in the six month period ended
June 30, 2000 was $101,000 of costs related to the start-up of the Company's
e-commerce subsidiary, eParts eXchange, Inc. Included in SG&A expenses for the
six month




                                       10
<PAGE>   11
period ended June 30, 1999 is $705,000 of costs related to the Canadian
distribution business which was sold as of December 31, 1999. Before the effects
of these two factors, SG&A expenses related to the Company's base business
increased to $6,487,000 for the six months ended June 30, 2000 compared to
$4,574,000 in the same period of 1999. The increase was due primarily to
increased freight costs and additional marketing and sales costs associated with
obtaining new brake business.

     Other Expense for the six months ended June 30, 2000 increased by $238,000
to $1,167,000 from $929,000 for the same period of 1999. The increase is
attributable to higher interest expense in the six months ended June 30, 2000
compared to the same period of 1999. The increase in interest expense was due
primarily to a higher average level of borrowing and increasingly higher
interest rates during the period.

     The absence of a loss from discontinued operations for the six months ended
ended June 30, 2000 is due to the fact that the loss from the discontinued
Hungarian iron foundry operation for this period of $354,000 has been charged
against the reserve for such losses established as of December 31, 1999.

     The improvement in net income for the six months ended June 30, 2000 was
$178,000 compared to a net loss of $193,000 for the same period in 1999 was due
to the individual factors discussed above. Strong operating income of the US
brake parts business more than offset one-time facility realignment costs and
start-up costs of eParts eXchange, Inc.


LIQUIDITY AND CAPITAL RESOURCES

     Net cash used in operating activities from continuing operations for the
six months ended June 30, 2000 was $3,591,000. Cash generated through an
increase in accounts payable ($1.9 million) did not fully offset cash required
to finance growth in accounts receivable ($6.7 million) necessary to support the
Company's sales growth.

     Net cash used in investing activities was $831,000, which is attributable
to acquisition of various tooling, manufacturing equipment, and computer
equipment, particularly in connection with the Company's realignment and
consolidation of its friction manufacturing facilities and establishing its
e-commerce subsidiary, eParts eXchange, Inc.

     Net cash provided by financing activities was $4,787,000, consisting
primarily of borrowings under the Company's revolving credit agreement and
capital contribution to the Company's subsidiary, eParts eXchange, Inc. of
$450,000.

     The Company expects to continue to finance its operations through cash flow
generated from operations, borrowings under the Company's bank lines of credit
and credit from its suppliers.




                                       11
<PAGE>   12
ITEM 3.  QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK

     We believe that our Company does not have significant exposure to market
risk associated with derivative financial instruments, other financial
instruments, or derivative commodity instruments. The Company had previously
utilized only limited derivative financial instruments and did not use them for
trading purposes and has never used derivative commodity instruments. At June
30, 2000, there were no such derivative instruments. The fair value of financial
instruments, other than debt instruments, closely approximates their carrying
value. Because the interest rate of the revolving loan and the term loan with
LaSalle National Bank adjusts with the changes in the market rate of interest,
we believe that the fair value is equivalent to the carrying value. We believe
that the interest rate of 12.25% on the subordinated debenture is approximately
equal to the current rate available for similar debt. Accordingly, the fair
value of this debenture approximates its carrying value.


PART II  OTHER INFORMATION

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

         On June 1, 2000, Universal Automotive Industries, Inc. held its annual
meeting of shareholders. Present at this meeting, in person and by proxy, were
shareholders representing 4,380,661 of the 6,914,310 issued and outstanding
shares of Common Stock at the date of record (63.35% of the total number of
shares of Common Stock outstanding and entitled to vote). The following items
were voted upon at the meeting:

A) The following Directors were elected to the Board:
--------------------------------------------------------------------------------
Name                        Votes For        Votes Against       Votes Withheld
--------------------------------------------------------------------------------
Arvin Scott                 4,380,661              0                    0
--------------------------------------------------------------------------------
Yehuda Tzur                 4,380,661              0                    0
--------------------------------------------------------------------------------
Sami Israel                 4,380,661              0                    0
--------------------------------------------------------------------------------
Sheldon Robinson            4,380,661              0                    0
--------------------------------------------------------------------------------
Sol S. Weiner               4,380,661              0                    0
--------------------------------------------------------------------------------
Dennis L. Kessler           4,380,661              0                    0
--------------------------------------------------------------------------------

B) The firm of Altschuler, Melvoin and Glasser LLP was reappointed as the
Company's independent auditors for 2000. Holders of Common Stock holding
4,380,661 cast their votes in favor and no votes were cast against or abstained
from voting.

ITEM 6.   EXHIBITS AND REPORTS ON FORM 8-K

a) Exhibit 11 - Computation of Earnings Per Share






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                                   SIGNATURES

         Pursuant to the requirements of Section 13 or 15(d) of the Securities
and Exchange Act of 1934, the Company has duly caused this report to be signed
on its behalf by the undersigned, thereunto duly authorized.


                             UNIVERSAL AUTOMOTIVE INDUSTRIES, INC.


                             /s/ ARVIN SCOTT
                             ---------------------------------------------------
                             Arvin Scott, Chief Executive Officer, President
                             (Principal Executive Officer)

                             /s/ JEROME J. HISS
                             ---------------------------------------------------
                             Jerome J. Hiss, Chief Financial Officer (Principal
                             Financial Officer and Principal Accounting Officer)

Date: August 14 , 2000










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