LAD Lithia Motors Inc

Lithia Motors, Inc. (NYSE: LAD) announced today that net income from continuing operations in the first quarter of 2009 was $0.2 million or one cent per diluted share, the same as prior year. Consolidated net income for the first quarter of 2009 was six cents per share after inclusion of one cent per share income from continuing operations and five cents per share income from discontinued operations and disposal activities. In the quarter, the Company had a net benefit from certain items of $1.5 million, including a gain on early extinguishment of debt and a net gain on asset sales and dispositions, partially offset by asset impairment charges.

First quarter 2009 revenue totaled $398 million, compared to $567 million in the year-ago period, driven primarily by lower vehicle sales. Same store sales for new and used vehicle retail sales declined 39.9% and 13.0% respectively, when compared to the same quarter last year. Parts and service same-store sales declined 6.3% compared to the same quarter of last year.

Sid DeBoer, Lithia�s Chairman and CEO, commented: �We are pleased to post a profit in the first quarter of 2009. Despite the declining revenue base and decreasing same store sales, we were able to improve gross margins in each of our business lines and continue to reduce costs. As business conditions remain challenging, we have accelerated our cost reduction program. We now project our annualized cost savings on continuing operations to exceed $55 million.

�We continue to strengthen our balance sheet. We were in compliance with all debt covenants at the end of the quarter. As of today, only $6.9 million of our convertible notes due in May 2009 remain outstanding. We have generated approximately $41 million of cash since January 1st from financings, the sale of assets and other activities. Our liquidity is strong, including cash and availability on our credit facilities of approximately $52 million.

�We continue to execute the restructuring plan announced in June 2008. Of the 31 stores we identified for disposal, 20 have been divested to date,� concluded Mr. DeBoer.

The first quarter conference call may be accessed at 2:00 p.m. Pacific Time today by phone at 973-409-9255 Conference ID: 95124108. A playback of the conference call will be available after 5 p.m. Pacific Time April 29, 2009 through May 8, 2009 by calling 800-642-1687 access code: 95124108.

About Lithia

Lithia Motors, Inc. is a Fortune 700 Company, selling 27 brands of new and all brands of used vehicles at 91 stores, which are located in 13 states. Internet sales are centralized at www.Lithia.com. 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.

Additional Information

For additional information on Lithia Motors, contact the Investor Relations Department: 541-776-6591 or log-on to: www.lithia.com - go to Investor Relations

Forward-Looking Statements

This press release includes forward-looking statements within the meaning of the �Safe-Harbor� provisions of the Private Securities Litigation Reform Act of 1995, 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, future economic conditions and others set forth from time to time in the company�s filings with the SEC. We make forward-looking statements about our annualized cost savings. Specific risks in this press release include execution of the restructuring plan and expense reductions, future interest rates and macro-economic and market factors affecting the company�s sales levels and profitability.

LITHIA MOTORS, INC.

(In thousands except per share data)

Unaudited � Three Months Ended � � % March 31, Increase Increase 2009 � 2008 (Decrease) (Decrease) New vehicle sales $187,104 $312,358 $(125,254) (40.1) � % Used vehicle sales 124,844 155,132 (30,288) (19.5) Finance and insurance 13,462 21,463 (8,001) (37.3) Service, body and parts 71,853 77,278 (5,425) (7.0) Fleet and other revenues 539 913 (374) (41.0) Total revenues 397,802 567,144 (169,342) (29.9) � � � � Cost of sales 319,620 470,205 (150,585) (32.0) Gross profit 78,182 96,939 (18,757) (19.3) SG&A expense 68,059 82,577 (14,518) (17.6)

Depreciation and amortization

4,307 4,538 (231) (5.1) Income from operations 5,816 9,824 (4,008) (40.8) � Floorplan interest expense (2,863) (5,062) (2,199) (43.4) Other interest expense (3,779) (4,449) (670) (15.1) Other income, net 1,171 63 1,108 1,758.7

Income from continuing operations before income taxes

345 376 (31) (8.2) � Income tax expense 153 154 (1) (0.6) Income tax rate 44.1% 41.0% � � Income from continuing operations 192 222 (30) (13.5) � Discontinued operations:

Loss from operations, net of income tax

(1,594) (2,383) (789) (33.1)

Gain from disposal activities, net of income tax

2,731 - 2,731 NM Net income (loss) $1,329 $(2,161) 3,490 161.5 � Diluted net income per share: Continuing operations 0.01 0.01 - - Discontinued operations:

Loss from operations, net of income tax

(0.08) (0.12)

Gain from disposal activities, net of income tax

0.13 - � � Net income per share $0.06 $(0.11) $0.17 154.5 Diluted shares outstanding 20,831 19,962 869 4.4 % �

NM � not meaningful

Lithia Motors, Inc.

(Continuing Operations)

� Three Months Ended �

�

� % � Unaudited March 31,

�

Increase

Increase 2009 � � 2008

�

(Decrease)

(Decrease)

Unit sales:

New vehicle 6,243 10,542 (4,299) (40.8) % Used - retail vehicle 7,055 7,105

(50)

(0.7) Used - wholesale 3,077 4,660 (1,583) (34.0) Total units sold 16,375 22,307 (5,932) (26.6) �

Average selling price:

New vehicle $ 29,970 $ 29,630 $ 340 1.1 % Used - retail vehicle 15,392 17,496 (2,104) (12.0) Used - wholesale 5,283 6,614 (1,331) (20.1) �

Gross margin/profit data

New vehicle retail 8.7 % 7.8 % 90 bps Used vehicle retail 12.4 % 12.0 % 40 bps Used vehicle wholesale 2.3 % (1.2) % 350 bps Service, body & parts 47.7 % 46.9 % 80 bps Finance & insurance 100.0 % 100.0 % - Gross profit margin 19.7 % 17.1 % 260 bps New retail gross profit/unit $2,604 $2,312 $292 Used retail gross profit/unit 1,916 2,095 (179) Used wholesale gross profit/unit 120 (83) 203 Finance & insurance/retail unit 1,012 1,216 (204) �

Revenue mix:

New vehicles 47.0 % 55.1 % Used retail vehicles 27.3 % 21.9 % Used wholesale vehicles 4.1 % 5.4 % Finance and insurance, net 3.4 % 3.8 % Service and parts 18.1 % 13.6 % Fleet and other 0.1 % 0.2 %

Lithia Motors, Inc.

(Brand Mix)

� Three Months Ended Unaudited March 31, 2009 � 2008

New vehicle unit sales brand mix � continuing operations:

� � Chrysler Brands 33.8 % 33.5 % General Motors & Saturn 16.0 % 18.9 % Toyota 13.9 % 14.5 % Honda 8.9 % 8.5 % Ford 5.0 % 4.8 % BMW 5.0 % 4.4 % Hyundai 3.7 % 2.7 % Nissan 3.3 % 4.8 % Volkswagen, Audi 3.8 % 3.0 % Subaru 4.2 % 2.4 % Mercedes 0.6 % 0.5 % Other 1.8 % 2.0 % �

New vehicle unit sales brand mix � including discontinued operations:

Chrysler Brands 36.7 % 38.4 % General Motors & Saturn 14.9 % 17.1 % Toyota 14.1 % 14.4 % Honda 7.9 % 6.9 % Ford 4.9 % 4.9 % BMW 4.5 % 3.6 % Hyundai 4.1 % 3.1 % Nissan 2.9 % 4.0 % Volkswagen, Audi 3.4 % 2.5 % Subaru 4.1 % 2.4 % Mercedes 1.0 % 1.2 % Other 1.5 % 1.5 %

LITHIA MOTORS, INC.

(Selected Same Store Data)

Unaudited

�

Three Months Ended

March 31,

2009

�

2008

Same store total sales geographic mix:

� � Texas 24.3 % 29.1 % Oregon 16.1 % 14.8 % California 11.1 % 11.1 % Alaska 9.8 % 7.9 % Washington 8.7 % 8.9 % Iowa 7.0 % 7.0 % Montana 7.3 % 6.8 % Idaho 7.5 % 6.8 % Nevada 4.9 % 4.4 % Colorado 1.9 % 1.8 % Nebraska 1.4 % 1.4 % �

Same store revenue:

New vehicle retail sales (39.9) % (12.9) % Chrysler Brands (39.7) % (16.7) % General Motors & Saturn (47.6) % (5.6) % Toyota (44.5) % 4.2 % All other brands (33.4) % (18.7) % Used vehicle retail sales (13.0) % (9.3) % Used wholesale sales (48.1) % (8.0) % Total vehicle sales (excluding fleet) (33.2) % (11.7) % Finance & insurance sales (33.0) % (11.7) % Service, body and parts sales (6.3) % 3.5 % Total sales (excluding fleet) (29.5) % (9.9) % Total gross profit (excluding fleet) (17.9) % (14.1) %

LITHIA MOTORS, INC.

Balance Sheet Highlights (Dollars in Thousands) Unaudited � March 31, 2009 � December 31, 2008 Cash & cash equivalents $9,104 $10,874 Trade receivables* 60,031 69,615 Inventory 391,959 422,812 Assets held for sale 139,603 161,423 Other current assets 10,331 31,828 Total current assets 611,028 696,552 � Real estate, net 284,875 284,088 Equipment & other, net 59,238 62,188 Other assets 93,144 90,631 Total assets $1,048,285 $1,133,459 � Flooring notes payable $264,901 $337,700 Liabilities related to assets held for sale 89,162 108,172 Current maturities of senior subordinated convertible notes 39,300

42,500

Other current liabilities

110,746

108,656 Total current liabilities

504,109

597,028 � Real estate debt 171,239 163,708 Other long-term debt 87,683 101,476 Other liabilities

33,664

22,904 Total liabilities $796,695 $885,116 � Shareholders' equity 251,590 248,343 � � Total liabilities & shareholders' equity $1,048,285 $1,133,459 � *Note: Includes contracts-in-transit of $23,589 and $27,799 for 2009 and 2008 �

Other balance sheet data

Lt debt/total cap (excludes real estate) 26% 29% Book value per basic share 12.12 12.30 �

Debt covenant ratios

Requirement

As of March 31, 2009

Minimum net worth Not less than $175 million $252 million Fixed charge coverage ratio Not less than 1.0 to 1 1.30 to 1 Cash flow leverage ratio Not more than 3.0 to 1 2.48 to 1 Minimum current ratio Not less than 1.2 to 1 1.32 to 1