Disposal

European Motor Hldgs PLC
17 January 2006


EUROPEAN MOTOR HOLDINGS plc ("EMH")

DISPOSAL

At the time of the acquisition of Smith Knight Fay (Holdings) Limited ("SKF") on
1 July 2005, we announced that EMH was the subject of a review by Toyota and
Lexus to assess the enlarged group's candidacy for those franchises and that
approval had been given for SKF to continue to operate the franchises in the
intervening period.  The assessment procedures were successful and EMH was
approved as a partner for both franchises and looks forward to having the
opportunity to work with them in the future.  However, following discussions
with the manufacturers, it has been agreed to dispose of the existing Toyota and
Lexus franchises in line with those manufacturers' market area arrangements.
SKF's Mazda business shares a property with the Lexus business and EMH has
therefore decided to dispose of the Mazda business at the same time.

Accordingly, on 16 January 2006 the group disposed of the business and certain
assets of SKF's three Toyota businesses, one Lexus business and one Mazda
business to RRG Group Limited ("RRG").  The businesses disposed of operate in
the South Manchester area (Stockport, Denton and Macclesfield).  RRG already
operates other Toyota and Lexus franchises in the North Manchester area.  The
total consideration for this transaction was £13.2 million, which has been
settled in cash, and the gross assets disposed of amounted to £12.5 million.
The assets disposed of include three freehold properties from which the Toyota
businesses operate.  The Lexus and Mazda businesses operate from a site which
forms part of a larger freehold property which is also used by other SKF
businesses.  SKF has therefore leased the Lexus/Mazda site to RRG for a minimum
of seven years and a maximum of twenty years at an initial annual rent of
£330,000.

SKF accounts for borrowings and interest centrally and historically only
produced accounts for individual businesses to operating profit level.  In the
year ended 31 May 2004 (the latest period for which audited accounts are
available) the businesses disposed of made a contribution to SKF's operating
profits of £1.4 million.  Management accounts for the thirteen months ended 30
June 2005 indicate that the businesses made a contribution to SKF operating
profits in that period of £1.3 million.  Interest on the disposal consideration
and the rental income from the Lexus/Mazda site are estimated to amount to
approximately £1.1 million in a full year.

The proceeds of the disposal will be used to reduce the group's borrowings which
were increased significantly on the acquisition of SKF.  The disposal will allow
EMH to continue to concentrate on its chosen manufacturer partners of BMW group,
Premier Automotive Group and Volkswagen group, with the potential of being
awarded Toyota and/or Lexus franchises in the future.

EMH will be making a trading update announcement in February, but the Board does
not expect the disposal to have an impact on the group's forecast pre
exceptional results for either the year ending 28 February 2006 or the
subsequent financial year.


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