Shasta Nissan-Subaru is closing and owner Ted Arellano said today that he is selling his Nissan franchise to SJ Denham Inc and Subaru franchise to Lithia.

Lithia Motors Inc. is adding a Subaru franchise in Northern California, according to a report by the Record Searchlight newspaper.

Shasta Nissan-Subaru is closing and owner Ted Arellano said today that he is selling his Nissan franchise to S.J. Denham Inc. and Subaru franchise to Lithia. The Medford-based auto retailer already operates a Toyota and Chevrolet dealership next to Arellano on Cypress Avenue.

Arellano said the deal with Lithia is expected to close by March 15 and Lithia will move next door to sell new and used Subarus.

"The deal is not completed," Lithia Chairman and Chief Executive Officer Sid DeBoer told the Mail Tribune Tuesday. "We don't comment when we do an acquisition until they are finalized and we own it."

Lithia most recently picked up a Kia franchise in Anchorage, Alaska, in October.

Arellano told the Record Searchlight that Subaru's and Nissan's preference for dealers to operate stand-alone stores precipitated the sale.

The present operation has 33 employees.

"I believe that Lithia is going to hire the majority of our employees because they need all the same people. I have a service manager, office parts manager; I feel confident my employees will have a job," Arellano said. "Lithia made a very generous offer and it helps them to complement an auto center with their dealership."

Reach Mail Tribune reporter Greg Stiles at 541-7764463 or gstiles@mailtribune.com.