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Lithia Motors, Inc. Adds New Chrysler Platform

5 March 1999

Lithia Motors, Inc. Adds New Chrysler Platform Which Will Increase Revenue Run Rate to Over $1.2 Billion

    MEDFORD, Ore., March 4 -- Lithia Motors, Inc.
today announced that it has entered into definitive agreements to add a seven
dealership platform in four rapidly growing markets in Colorado and Nevada
which form the Moreland Automotive Group. The dealerships are Cherry Creek
Dodge, Centennial Chrysler/Plymouth/Jeep, Colorado Chrysler/Plymouth, Colorado
Jeep/Kia, Colorado Springs Chrysler/Plymouth/Jeep, Foothills Auto Plaza
(Dodge/Chrysler/Plymouth/Jeep/Hyundai/Suzuki) and Reno Auto Sales. The six
Colorado dealerships sell Chrysler products, Lithia's historically best
performing franchises, and represent three new markets and form the base for a
new platform in the Inter-Mountain States. This Chrysler dominance in Colorado
extends from Fort Collins to Southern Colorado, including Colorado Springs.
The seventh dealership has Subaru and Hyundai franchises and is a "fill-in" in
the Reno, Nevada market where Lithia currently has three dealerships. These
dealerships sold over 18,000 new and used vehicles and have combined 1998
revenues of $390 million. Upon completion of this transaction which will be
accounted for as a purchase, Lithia Motors will have annualized revenues of
over $1.2 billion.
    Lithia's initial net investment in the stores will total approximately
$50 million and will be paid in a combination of Class A Common Stock and a
new series of Preferred Stock redeemable at the option of the company. The
balance will be paid in cash with borrowings from the company's used vehicle
flooring line. The $75 million acquisition credit facility with Ford Motor
Credit will not need to be utilized in this transaction.  Doug Moreland will
join the Lithia Board, and key executives will execute long-term employment
contracts and operate the new platform group. The transaction is subject to
customary closing requirements, including obtaining approval from the
manufacturers.  Lithia expects the transaction to be completed during the
second quarter of 1999.
    Sidney B. DeBoer, Chairman and CEO, stated, "We are pleased to have Doug
Moreland and his organization join the Lithia Group.  It took a great deal of
diligence to find the platform group that had the right fit for us in terms of
people, operations, and franchises. The Moreland Group is the largest
Chrysler/Dodge/Jeep dealer group in the State of Colorado and one of the
largest privately held Chrysler product groups in the country.  Doug Moreland
is a veteran auto retailer whose focus on customer service and vision of the
automotive industry are closely aligned with those of Lithia's management."
    Dick Heimann, President and COO of Lithia Motors, previously made his home
in Colorado where he began his automotive career with Chrysler, and has stayed
in close touch with the great Rocky Mountain Market.  Mr. Heimann stated, "The
combination of Chrysler, Lithia and Moreland in the Colorado market represents
an unprecedented winning opportunity for growth. The Moreland dealerships
provide Lithia with a dominant market position with Chrysler products in a
market with strong population growth and high demand for trucks and sport
utility vehicles.  More importantly, with the new platform, we can pursue
"fill-in" acquisitions in the surrounding markets which will further improve
our return on investment."
    Doug Moreland, President of the Moreland Group, stated, "I chose to invest
in Lithia because of their intense operational focus of selling cars and
making customers happy.  Lithia's management team has the same strong Chrysler
background as myself and my management staff. This is a natural fit in terms
of communication and strategic objectives.  We are excited about being a part
of the best public automobile dealership group in the country."
    Doug Moreland's 30 years of experience in the automotive business has
earned him many honors, including:  Charger/Pacesetter/Eagle Club (over
20 times); multiple five star Chrysler dealer awards; Subaru top 20 dealer and
Subaru Chairman Roundtable Dealer the last three years; Chrysler/Plymouth
National Dealer Council; Dodge National Dealer Council; Current Vice President
and President Elect Colorado Automobile Dealer Association; President Front
Range Chrysler/Plymouth Advertising Association; and Executive Committee of
Chrysler Dealer Advertising Association.
    Upon completion, Lithia will operate 35 dealerships in 14 markets located
in California, Oregon, Washington, Nevada and Colorado.  The company will sell
24 brands of new vehicles through 77 franchises.  Lithia also sells used
vehicles, arranges finance, warranty, and credit insurance contracts, provides
vehicle parts, maintenance, and repair services at all of its locations.  The
company will operate 6 collision repair centers.
    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 filing with the SEC.