1031203--2/27/2007--GROUP_1_AUTOMOTIVE

related topics

{customer, product, revenue}

{acquisition, growth, future}

{provision, law, control}

{cost, regulation, environmental}

{condition, economic, financial}

{debt, indebtedness, cash}

{product, candidate, development}

{tax, income, asset}

{loss, insurance, financial}

{personnel, key, retain}

{stock, price, share}

{product, market, service}

{competitive, industry, competition}

If we fail to obtain a desirable mix of popular new vehicles from manufacturers our profitability can be affected. If we fail to obtain renewals of one or more of our franchise agreements on favorable terms or substantial franchises are terminated, our operations may be significantly impaired. Our success depends upon the continued viability and overall success of a limited number of manufacturers. Manufacturers restrictions on acquisitions may limit our future growth. Manufacturers restrictions could negatively impact our ability to obtain certain types of financings. Certain restrictions relating to our management and ownership of our common stock could deter prospective acquirers from acquiring control of us and adversely affect our ability to engage in equity offerings. If manufacturers discontinue or change sales incentives, warranties and other promotional programs, our results of operations may be materially adversely affected. Growth in our revenues and earnings will be impacted by our ability to acquire and successfully integrate and operate dealerships. If state dealer laws are repealed or weakened, our dealerships will be more susceptible to termination, non-renewal or renegotiation of their franchise agreements. If we lose key personnel or are unable to attract additional qualified personnel, our business could be adversely affected because we rely on the industry knowledge and relationships of our key personnel. The impairment of our goodwill, our indefinite-lived intangibles and our other long-lived assets has had, and may have in the future, a material adverse effect on our reported results of operations. Changes in interest rates could adversely impact our profitability. A decline of available financing in the sub-prime lending market has, and may continue to, adversely affect our sales of used vehicles. Our insurance does not fully cover all of our operational risks, and changes in the cost of insurance or the availability of insurance could materially increase our insurance costs or result in a decrease in our insurance coverage. Substantial competition in automotive sales and services may adversely affect our profitability due to our need to lower prices to sustain sales and profitability. We are subject to substantial regulation which may adversely affect our profitability and significantly increase our costs in the future. Our automotive dealerships are subject to federal, state and local environmental regulations that may result in claims and liabilities, which could be material. Our indebtedness and lease obligations could materially adversely affect our financial health, limit our ability to finance future acquisitions and capital expenditures, and prevent us from fulfilling our financial obligations. Our stockholder rights plan and our certificate of incorporation and bylaws contain provisions that make a takeover of Group 1 difficult. We can issue preferred stock without stockholder approval, which could materially adversely affect the rights of common stockholders.

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1031203--2/27/2007--GROUP_1_AUTOMOTIVE_INC