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Lithia Completes Deal for Sun Valley Ford and Sun Valley Volkswagen in Concord, California

19 August 1997

Lithia Completes Deal for Sun Valley Ford and Sun Valley Volkswagen in Concord, California

    MEDFORD, Ore., Aug. 19 -- Lithia Motors, Inc.
completed its previously announced acquisition of Sun Valley Ford and Sun
Valley Volkswagen in Concord, California and began operating as of the middle
of August as Lithia Sun Valley Ford and Lithia Sun Valley Volkswagen of
Concord.  Approval from Ford and Volkswagen was granted and all personnel and
asset transfers were completed smoothly.
    The aggregate purchase totaled $18.3 million and included all of the
inventory and other assets of the dealerships and certain leasehold
improvements.  Payment was made in cash and notes, using bank financing for
the purchase of new car inventory.  The dealerships had combined sales of
$70 million in 1996.  The acquisition will be accounted for as a purchase and
is the company's fifth since November 1996.
    Sidney B. DeBoer, Chairman and CEO, stated, "This acquisition is our
second in Concord and fourth in Northern California and fits well with our
strategy of acquiring strong franchises in medium-sized markets in the Western
United States.  We now have established a strong operating base of five stores
and nine franchises in Northern California upon which to build our future
expansion.  Concord is a strong East Bay market and we will achieve economies
of scales rapidly with four different automobile franchises.  We are most
excited about adding our second Ford store and second Volkswagen store and are
pleased with how these relationships have developed."
    Separately, Lithia announced that Sidney B. DeBoer has been approved as a
qualified Saturn retailer and that Lithia may be allowed to acquire more
Saturn franchises in the future.  Lithia believes that it is the only
publicly-owned company to receive such approval since its two classes of stock
meet the manufacturer's requirement to have a qualified Saturn retailer in
voting control of the company.  Mr. DeBoer has been trained in Saturn's unique
retailing philosophies since 1992 when Lithia began to operate as Saturn of
Southwest Oregon.
    This press release includes forward looking statements, which management
believes is 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.