SECOND AMENDMENT

                                       TO

                              EMPLOYMENT AGREEMENT



            This Second Amendment to Employment Agreement,  dated as of April 1,
1997 (the "Amendment"),  is by and between MOTORCAR PARTS & ACCESSORIES,  INC, a
New York  corporation  having an  address  at 2727  Maricopa  Street,  Torrance,
California 90503 (the "Company") and STEVEN KRATZ, an individual with an address
c/o  Motorcar  Parts  &  Accessories,  Inc.,  2727  Maricopa  Street,  Torrance,
California 90503 (the "Employee").

            WHEREAS,  the Company and the Employee are parties to an  Employment
Agreement dated as of February 1, 1994 (the "Agreement"); and

            WHEREAS,  the Company and the Employee desire to amend the Agreement
in certain respects.

            NOW,  THEREFORE,  in  consideration  of the foregoing and the mutual
covenants and  conditions  hereinafter  set forth,  the parties  hereby agree as
follows:

            1. Amendment to the Agreement. The Agreement is hereby amended as of
April 1, 1997, as follows:

            The  first  paragraph  of  Paragraph  5 of the  Agreement  is hereby
amended in its entirety as follows:

                        "5.  Compensation.  As compensation for his services and
            covenants  hereunder,  the Company shall pay Employee a minimum base
            salary  ("Salary")  of  Two  Hundred  Twenty-Five  Thousand  Dollars
            ($225,000)  per year.  The  Salary  shall be  subject  to review and
            adjustment on an annual basis, or, at the Company's  discretion,  on
            such date as the Company may designate;  provided,  however, that in
            no event  shall  Employee's  Salary be  adjusted  below  the  Salary
            designated herein."

            2.  Counterparts.  This  Amendment  may be  signed  in  one or  more
counterpart  copies,  each of which  constitutes an original,  but all of which,
when taken  together,  shall  constitute  one agreement  binding upon all of the
parties hereto.

            3. Governing Law. This Amendment  shall be governed by and construed
in  accordance  with the laws of the  State of New York,  without  regard to the
conflicts of law rules thereof.





            4. Agreement to Continue as Amended.  Except as modified and amended
by this  Amendment,  the  Agreement  shall remain and continue in full force and
effect after the date hereof.

            IN WITNESS WHEREOF, the parties hereunto have executed and delivered
this Amendment as of the date first written above.


                                              MOTORCAR PARTS & ACCESSORIES


                                              By:
                                                  ------------------------------
                                                  Name:
                                                  Title:



                                                  -----------------------------
                                                  Steven Kratz



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