Lithia Motors Acquires Pierce Dodge and Pierce Honda in Great Falls, Mont.; Lithia Now Has Five Dealerships in Montana

MEDFORD, Ore.--Sept. 20, 2004--Lithia Motors, Inc. the country's eighth-largest automotive dealership group, today announced it has acquired Pierce Chrysler/Jeep/Dodge and Pierce Honda in Great Falls, Montana. These are Lithia's first dealerships in the Great Falls market. Lithia's other stores in Montana include Lithia Dodge of Billings, Chevrolet of Helena, and Lithia Auto Center of Missoula with the Chrysler and Dodge brands.

The acquisitions of Pierce Dodge/Chrysler/Jeep and Pierce Honda -- with combined sales of approximately $40 million annually -- bring Lithia's total number of acquisitions in 2004 to seven. These two dealerships will start up operations as Lithia Chrysler, Jeep, Dodge of Great Falls and Lithia Honda of Great Falls on Sept. 22, 2004. Lithia now generates approximately $140 million in annualized revenues in the state of Montana.

"We entered Montana back in April of 2003 with the acquisition of our Missoula operations. The Montana market has proven to be a successful and strong market for Lithia Motors," said Lithia Chairman and CEO Sid DeBoer. "The company began as a small Dodge store in Southern Oregon, where we learned that customer service and establishing long-term relationships with our customers is vital. Lithia also brings uniform practices and a fully integrated operations method to the stores it acquires. Lithia's process of adding the industries best operating practices and a culture of customer service to our newly acquired operations ensures that these stores will prosper in the future."

About Lithia Motors

Lithia Motors, Inc. is a Fortune 1000 and Russell 2000 Company that sells 25 brands of new vehicles and operates 83 stores and 152 franchises in 12 Western states and over the Internet through "Lithia.com-America's Car & Truck Store." Founded in 1946, Lithia expanded from one dealership to a $2.5 billion industry-leading dealer group by 2003. Lithia became a publicly traded company in 1996. The company retailed 95,255 new and used vehicles in 2003. Lithia also arranges finance, warranty, and credit insurance contracts; and provides vehicle parts, maintenance, and repair services at all of its locations. In Fortune magazine's 2004 "Most Admired Companies" survey, Lithia ranked No. 2 among all dealerships in the Automotive Retailing/Services category. Highlighting the great partnerships it has developed in each community, the list ranked Lithia No. 1 in "social responsibility," one of eight criteria used to measure each business against its competition.

For additional information on Lithia Motors, contact: Jeff DeBoer, Senior VP and Chief Financial Officer 541-776-6868 (E-mail: invest@lithia.com) or Dan Retzlaff, Director Investor Relations at 541-776-6819. Media contact: Kristen Siefkin, 503-546-7866, or log-on to: Lithia.com -- About Lithia -- Investor Information.