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Lithia Motors Clarifies its Growth Strategy

18 December 1998

Lithia Motors Clarifies its Growth Strategy

    MEDFORD, Ore., Dec. 18 In response to press articles
reporting negotiations between Lithia Motors, Inc. and United
Auto Group, Inc., Sidney B. DeBoer, Chairman and Chief Executive Officer of
Lithia Motors, stated that "No acquisition agreement exists nor are
negotiations being held between the two companies."
    He continued, "Our press release of December 17 outlines our operating and
acquisition strategy which has resulted in the acquisition of 23 dealerships
since going public two years ago."
    Lithia's 28 dealerships in California (14), Oregon (9), Nevada (3) and
Washington (2), sell 23 brands of new vehicles through 56 franchises.  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.  Since becoming a public company in December of 1996, Lithia
has acquired 23 stores with annual revenues of approximately $680 million,
boosting its revenue run-rate to over $820 million.  Its headquarters are in
Medford, Oregon, the site of Lithia's original group of dealerships.
    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, manufacturer approval, and others set forth from
time to time in the company's filings with the SEC.