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                                                                   EXHIBIT 10.14




                                     NISSAN
                         NISSAN MOTOR CORPORATION U.S.A

December 11, 1996

Mr. Charles M. Smith
Acura Southwest
10455 Southwest Fwy.
Houston, TX 77074-1101

Dear Mr. Smith:

         You have requested that Nissan Motor Corporation in U.S.A. ("Nissan")
consent to a re-structuring of your dealerships wherein the Sterling Automotive
Group, Inc. ("Sterling"), which will become a publicly held corporation,
acquires all of the stock of Round Rock Nissan, Inc.; Town North Nissan, Inc.;
and Courtesy Nissan, Inc., ("Dealer").

This is to advise you that Nissan has approved the proposed restructuring and
transfer in principle, SUBJECT TO THE EXECUTION BY DEALER AND YOU OF A TERM
AGREEMENT ("AGREEMENT") AND INDEMNIFICATION AGREEMENT IN A FORM ACCEPTABLE TO
NISSAN CONTAINING CERTAIN TERMS AND CONDITIONS INCLUDING, BUT NOT LIMITED TO
THE FOLLOWING:

1.       Sterling will at all times own 100% of the stock of Dealer;

2.       Dealer will be maintained as a separate corporate entity;

3.       The officers of Dealer will be Charles M. Smith ("Smith" or "you"),
         Sterling B. McCall, Jr., and James M.  Kline;

4.       Smith agrees that any transfer of his ownership interest in Sterling,
         or other action (such as dilution due to subsequent acquisitions)
         which would significantly decrease his overall ownership in Sterling
         requires the prior written consent of Nissan, which will not be
         unreasonably withheld.  Accordingly, any change in the ownership of
         one or more key directors which would result in an ownership interest
         less than 20% without consent from Nissan will be void and grounds for
         termination of the Agreement;

5.       Nissan will have no obligation to transact business with any person
         who is not named either as a Dealer Principal or Executive Manager of
         Dealer in the Agreement;

6.       Restrictions in the Registration Statement providing that in the event
         that anyone acquires, after the date of the initial public offering,
         an ownership interest in Sterling greater than 20% and Nissan
         determines that said interest is adverse to Nissan, the Agreement
         shall be terminated.  This provision would not, however, prevent
         Sterling from re-applying for the dealership based on the new
         ownership structure;

7.       Smith, Ronald Kutz, Catherine Andrus, and Randy Ross will devote 100%
         of their time to the affairs of Dealer;
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Mr. Charles M. Smith
December 11, 1996
Page 2


8.       The Board of Directors of Sterling will delegate the management of the
         dealership operations to the Dealer Principal and the Executive
         Manager and the Dealer Principal and Executive Manager will have full
         and complete control over the Dealership Operations;

9.       The Executive Manager will be physically present at the dealership on
         a full-time basis and have a substantial portion of their compensation
         tied to Dealer's overall performance;

10.      Any change in the Dealer Principal or Executive Manager of Dealer, or
         the CEO, Chairman or equivalent officer of Sterling, from that
         specified in the Agreement requires the prior written consent of
         Nissan and any change in the management of Dealer or the CEO, Chairman
         or equivalent officer of Sterling without such consent is void and
         grounds for termination.

11.      Site Control rights, including the Right of First Refusal on sale of
         dealership assets in the event of a transfer by dealer or a change in
         control of Sterling as referred to in paragraphs 4 and 6 above, Right
         of First Refusal on the sale or lease of the dealership property and
         Exclusivity;

12.      Dealer must achieve at least regional average sales penetration and
         CSI within six months of the date of the Agreement and maintain at
         least regional average sales penetration and CSI at all times
         thereafter.  Sterling will not be considered for additional
         dealerships until it is in compliance with this provision; and

13.      Smith, Sterling B. McCall, Jr., and James M. Kline will hold harmless
         and indemnify Nissan from and against all losses, liabilities, claims,
         etc., relating to the public offering.

Additionally, receipt of outstanding documentation and any additional
documentation as requested may be necessary in order to complete processing to
this receipt.

Very Truly Yours,

NISSAN MOTOR CORPORATION U.S.A



J.C. Fassino
Regional Vice President
South Central Region