SAN FRANCISCO (Dow Jones) -- Lithia Motors Inc. (NYSE:LAD) will divest at least 9% of its stores, cut jobs and consolidate offices over the next 90 days, the company said Monday, citing a sixfold increase in oil prices since 2002.

The Oregon-based auto retailer plans to close 10 to 15 of its 110 stores, restructure its personnel and their duties and "reduce headcount across the company."

In doing so, Lithia Motors (NYSE:LAD) said it hopes to save $1 million a month over the next year, coupled with $6 million in planned cuts announced at the end of April. This would yield a total of $18 million in savings over the next year.

Lithia Motors (NYSE:LAD) said falling consumer confidence, declining home values and domestic automakers' loss of market share contributed to declining sales, but it called increasing gasoline prices the driving force behind the company's problems.

The company also said it plans to adjust its inventory to carry smaller, more fuel-efficient autos, sell all unnecessary land and assets, finance all unfinanced real estate, adjust prices and hold off on future purchases until they are more cost-effective.

"April sales volume came in a little below plan, but May is tracking in line with our internal projections. With the cost cuts partially in place and the positive trend in May, we are hoping that June comes in ahead of projections," said Lithia CEO Sid DeBoer.

Shares of Lithia were trading down nearly 3% to $6.65 on the New York Stock Exchange. They earlier hit a 52-week low at $6.52.

    (END) Dow Jones Newswires   06-02-08 1146   Copyright (c) 2008 Dow Jones & Company, Inc.