AUTOCANADA INC. Announces Sale of Dealership

EDMONTON, May 16 /CNW/ - AutoCanada Inc. ("AutoCanada" or the "Company") (TSX: ACQ) today announced the entering into of an agreement of purchase and sale for its Colombo Chrysler Jeep Dodge dealership, located in Woodbridge Ontario.  Colombo Chrysler Jeep Dodge sold 733 new and used vehicles in 2010.  The Company anticipates the closing of the purchase and sale within the next 30 to 45 days.

"Although the Company is very pleased with the performance of its Chrysler Jeep Dodge dealerships generally, profitability at Colombo Chrysler Jeep Dodge has been a challenge for Management. As the current facility lease was due to expire within the next 18 months, a relocation with its attendant costs was likely, and as it is expected that the impact of this sale on the Company's net income will be positive for 2011, it was determined that shareholder value would be best served by the sale of the dealership, allowing Management to better focus its efforts and resources on its other dealerships", stated Gordon Barefoot, Chair of AutoCanada.

About AutoCanada

AutoCanada is one of Canada's largest multi-location automobile dealership groups, currently operating 23 franchised dealerships in British Columbia, Alberta, Manitoba, Ontario, New Brunswick and Nova Scotia. In 2010, our dealerships sold approximately 24,000 vehicles and processed approximately 317,000 service and collision repair orders in our 339 service bays.

Additional information about AutoCanada Inc. is available at the Company's website at www.autocan.ca and www.sedar.com.

SOURCE AutoCanada Inc.

For further information:

Jeff Christie, CA
Vice-President, Finance

Phone:  (780) 732-7164

Email: jchristie@autocan.ca


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