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Lithia Motors, Inc. to Acquire Bakersfield Nissan and Bakersfield BMW Acura in Bakersfield, California

7 July 1997

Lithia Motors, Inc. to Acquire Bakersfield Nissan and Bakersfield BMW Acura in Bakersfield, California

    MEDFORD, Ore., July 7 -- Lithia Motors, Inc.
announced today that it has signed a definitive agreement to acquire
Bakersfield Nissan and Bakersfield BMW/Acura in Bakersfield, California from
the same owner.
    The transaction is valued at approximately $10.6 million depending on
inventory levels at closing.  Payment will be made in cash and notes with the
seller's option at the time of closing to receive shares in lieu of the note.
Bank financing will be utilized to fund the majority of the purchase,
including new and used inventory and equipment.  Closing is expected at the
end of the third quarter or early in the fourth quarter of 1997 and is subject
to the customary conditions, including approval by the manufacturers.  The
dealerships had combined sales of $41 million in 1996.  These acquisitions
will be accounted for as a purchase and are the company's seventh and eighth
since November 1996, bringing the total locations under operation to thirteen,
with seven in California and six in Oregon.
    Sidney B. DeBoer, Chairman and CEO, stated, "This acquisition is our first
in the growing Bakersfield market.  All aspects of this deal meet the
disciplined criteria of our acquisition strategy.  We are very excited about
taking on our first Nissan, Acura and BMW franchises."
    Separately, Lithia closed its previously announced acquisition of
Magnussen-Barbee Ford of Napa, California and began operating as of the
beginning of July as Lithia Ford, Lincoln/Mercury of Napa.  Approval for this
deal and a master agreement for future acquisitions were granted by Ford and
all personnel and asset transfers were completed smoothly.
    Also, Lithia announced the recent opening of its new body shop facility in
Southern Oregon and an expansion of the Medford Toyota Lincoln Mercury service
department to include a new "quick lube" facility and expanded service desk.
The body shop is one of the largest in the Northwest with close to an acre of
land under one roof equipped with the latest body and paint equipment.
Financing was secured from US Bank of Oregon.
    This press release includes forward looking statements, which management
believes are a benefit to shareholders.  These statements are necessarily
subject to risk and uncertainty and actual results could differ materially due
to certain risk factors, including without limitation economic conditions,
acquisition risk factors and others set forth from time to time in the
company's filings with the SEC.

SOURCE  Lithia Motors Inc.