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Lithia Motors, Inc. Acquires Century Ford and Century Mazda in Fresno, California

17 December 1997

Lithia Motors, Inc. Acquires Century Ford and Century Mazda in Fresno, California

    MEDFORD, Ore., Dec. 17 -- Lithia Motors, Inc.
announced today that it completed the acquisition of Century Ford and Century
Mazda in Fresno, California and began operation as Lithia Ford of Fresno and
Lithia Mazda of Fresno as of December 16,1997.
    The dealerships have estimated combined sales of $60 million for 1997 and
Lithia's total investment in the stores totals $4.1 million.  The acquisition
will be accounted for as a purchase and is the company's 11th and 12th since
November 1996, bringing the total locations under operation to 17, with nine
in California, six in Oregon and two in Nevada.  The inventories and equipment
purchases were financed through US Bank.  Following the purchase, the
$30 million acquisition line from US Bank continues to be fully available as
Lithia had sufficient equity in its used and program vehicles to fund this
investment.
    Sidney B. DeBoer, Chairman and CEO, stated, "These acquisitions are our
third and fourth in California's South Central Valley market area, which
includes Bakersfield.  Economies of scale will be realized with these
acquisitions and will be realized even further as we acquire additional stores
in this market area.  In addition, the demographics of Fresno fit perfectly
with our acquisition and operating strategies.  We are very excited about
taking on our fifth Ford Motor Co. product store.  The Mazda store is our
second and is the exclusive Mazda outlet for the entire Fresno market."
    Lithia has previously announced inventory and equipment purchases as part
of the total purchase price of its acquisitions.  These items are actually
bank financed.  In order to clarify and standardize the method of reporting
the equity investment in each acquisition, Lithia is disclosing the investment
amount for each of its previously announced acquisitions excluding all bank
financed items.  The amounts include goodwill, working capital, notes issued
to sellers and other initial investments:

    Eugene Dodge                                   $3.5 million
    Vacaville Toyota                               $3.9 million
    Concord Dodge/Isuzu                            $3.8 million
    Napa Ford/Lincoln-Mercury                      $3.7 million
    Sun Valley Ford & Sun Valley Volkswagen        $7.6 million
    Bakersfield Nissan & Bakersfield BMW/Acura     $5.8 million
    Reno Donnelly Isuzu/L-M/Suzuki/Audi &
     Sparks Donnelly Isuzu/L-M/Suzuki              $6.7 million

    As a result, Lithia's average equity investment as a percentage of sales
is 10.3% compared to an industry average of 23% of sales, based on available
industry data for the peer group.  Including the Fresno acquisitions, Lithia
has acquired $381 million in total annual revenue since going public one year
ago.
    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.