CORRECTED - UPDATE 1-Auto dealer Lithia to cut jobs, divest some stores

(Corrects in headline, paragraphs 1 and 7 that Lithia plans to sell, not close stores) (Adds details throughout)

DETROIT, June 2 (Reuters) - Auto dealer Lithia Motors Inc (LAD.N) plans to cut jobs, sell underperforming showrooms and reduce its exposure to U.S. car brands to offset falling sales, the company said on Monday.

High gasoline and diesel prices are the driving force behind the restructuring moves, along with falling consumer confidence, declining home values, tight credit markets, and loss of market share by U.S. auto manufacturers, Lithia said.

Weak economic conditions have hurt the U.S. light vehicle market, which is headed for a deeper downturn this year with only limited gains in 2009, according to analysts.

The sales drop has hit U.S. automakers General Motors Corp GM.N, Ford Motor Co (F.N) and Chrysler LLC especially hard. Chrysler brands represent the largest share of Lithia's sales.

Lithia said the restructuring, expected to be completed in three months, would result in savings of $1 million per month, or $18 million on an annualized basis.

The saving are in addition to the $6 million annualized cost cuts announced at the end of April, the company said.

The company did not reveal how many jobs it plans to cut. It said it would divest 10 to 15 underperforming stores.

The cost-cutting includes deferring uncommitted capital expenditures, selling all unnecessary property and assets, including aircraft and excess land, adjusting pricing of its cars, and focusing on smaller, more fuel-efficient new and used vehicles.

Lithia shares were down 29 cents, or 4.25 percent, to $6.54 in morning trade on the New York Stock Exchange. (Reporting by Poornima Gupta, editing by Gerald E. McCormick and John Wallace)