Lithia Motors Maintains Revenue Guidance and Revises Earnings Guidance For the Full Year 2003

MEDFORD, Ore., April 7 -- Lithia Motors, Inc. today announced that it is revising its full-year 2003 earnings guidance to $1.50 - $1.60 per share.

Chairman and Chief Executive Officer Sidney B. DeBoer stated, "The trends we experienced in the fourth quarter of 2002 have continued in the first quarter of the year. Because of the war and continued poor economic conditions, many of the markets where we operate are weak, however, we have continued our aggressive sales efforts and have taken new vehicle share in these markets. Because of these efforts we expect sales in the first quarter to be in line with past guidance, however, the first quarter's earnings will be lower than current analyst consensus estimates, due to lower margins and higher costs in the new vehicle side of the business. We have decided at this time to no longer issue quarterly guidance due to volatility and uncertainty in the current economic environment. Our full year guidance assumes improvement throughout the year. We feel it is critical for management to remain focused on our long-term plan."

"As a result of concerns about the sales environment going into the first half of the year and higher than normal new vehicle inventories at the end of 2002, the company took an even more aggressive stance towards new vehicle sales in the first quarter of 2003. The result was increased new vehicle sales with higher discounting which led to a decline in new vehicle margins. Additionally, in order to achieve these higher sales results, advertising and sales compensation expenses were higher than normal this quarter. Lithia's inventory position is much improved going into the second quarter of the year."

"In other news, we are continuing to execute our growth plan. Year to date, we have made three store acquisitions: most recently a Chevrolet Cadillac and Suzuki store located in Twin Falls, Idaho; a Hyundai store located in Anchorage, Alaska; and a Chevrolet store located in Salinas, California. Combined annualized revenues for the three stores total approximately $75 million. The acquisition pipeline looks strong for the remainder of the year as the uncertain economic environment is presenting us with increased acquisition opportunities. As a final note, Lithia resumed its stock repurchase program in the first quarter of the year by purchasing shares."

Lithia Motors, Inc. is a Fortune 1000 and Russell 2000 Company that sells 24 brands of new vehicles and operates 72 stores and 136 franchises in 10 states in the Western United States and over the Internet through "Lithia.com -- America's Car & Truck Store." Lithia also sells used vehicles; arranges finance, warranty, and credit insurance contracts; and provides vehicle parts, maintenance, and repair services at all of its locations. Lithia retailed 91,478 new and used vehicles and had $2.38 billion in total revenue in 2002.