EXHIBIT 10.40

                               FIRST AMENDMENT TO
                              EMPLOYMENT AGREEMENT

         This First Amendment to Employment Agreement ("Amendment") is entered
into between Group 1 Automotive, Inc. having offices at 950 Echo Lane, Suite
100, Houston, Texas 77024 ("Employer"), and B. B. Hollingsworth, Jr., an
individual currently residing at 5763 Indian Circle, Houston, Texas 77057
("Employee"), and amends the Employment Agreement entered into between Employer
and Employee dated March 1, 2002 (the "Employment Agreement.").

         For and in consideration of the mutual promises, covenants, and
obligations contained herein and in the Employment Agreement, Employer and
Employee agree as follows:

         Notwithstanding anything to the contrary in the Employment Agreement,
         in the event that any payment, benefit or distribution by Employer to
         or for the benefit of Employee, whether paid or payable or distributed
         or distributable pursuant to the terms of the Employment Agreement or
         otherwise (a "Payment"), would be subject to the excise tax imposed by
         Section 4999 of the Internal Revenue Code of 1986, as amended, or any
         interest or penalties with respect to such excise tax (such excise tax,
         together with any such interest or penalties, are hereinafter
         collectively referred to as the "Excise Tax"), Employer shall pay to
         Employee an additional payment (a "Gross-up Payment") in an amount such
         that after payment by Employee of all taxes (including any interest or
         penalties imposed with respect to such taxes), including any Excise Tax
         imposed on any Gross-up Payment, Employee retains an amount of the
         Gross-up Payment equal to the Excise Tax imposed upon the Payments.
         Employer and Employee shall make an initial determination as to whether
         a Gross-up Payment is required and the amount of any such Gross-up
         Payment. Employee shall notify Employer in writing of any claim by the
         Internal Revenue Service which, if successful, would require Employer
         to make a Gross-up Payment (or a Gross-up Payment in excess of that, if
         any, initially determined by Employer and Employee) within five days of
         the receipt of such claim. Employer shall notify Employee in writing at
         least ten days prior to the due date of any response required with
         respect to such claim if it plans to contest the claim. If Employer
         decides to contest such claim, then Employee shall cooperate fully with
         Employer in such action; provided, however, Employer shall bear and pay
         directly or indirectly all costs and expenses (including additional
         interest and penalties) incurred in connection with such action and
         shall indemnify and hold Employee harmless, on an after-tax basis, for
         any Excise Tax or income tax, including interest and penalties with
         respect thereto, imposed as a result of Employer's action. If, as a
         result of Employer's action with respect to a claim, Employee receives
         a refund of any amount paid by Employer with respect to such claim,
         then Employee shall promptly pay such refund to Employer. If Employer
         fails to timely notify Employee whether it will contest such claim or
         Employer determines not to contest such claim, then Employer shall
         immediately pay to Employee the portion of such claim, if any, which it
         has not previously paid to Employee.




         IN WITNESS WHEREOF, Employer and Employee have duly executed this
Amendment in multiple originals on May 21, 2003 to be effective as of March 1,
2002.

                        GROUP 1 AUTOMOTIVE, INC.



                        By:    /s/  Scott Thompson
                        Name:  Scott Thompson
                        Title: Executive Vice President, Chief Financial Officer
                               and Treasurer


                        /s/  B.B. Hollingsworth, Jr.
                        B. B. Hollingsworth, Jr.
                        Employee


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