AN AutoNation Inc

AutoNation Inc. Chief Executive Mike Jackson warned Wednesday that the sizzling pace of U.S. auto sales may already be cooling as some auto makers resort to higher incentives to move their metal.

The nation's largest dealership operator sold 35,962 vehicles in December, a 9% increase over the previous period a year earlier. However, the results were propped up by "significant retail discounts" within the premium luxury vehicle segment.

A glut of inventory has developed as consumers opt to buy cheaper or bigger vehicles and auto makers, such as Daimler AG and BMW AG, choose to stuff U.S. lots to offset slowdowns in other markets such as China.

Mr. Jackson said AutoNation's per-vehicle gross profit for new and used cars fell by as much as $300 in the fourth quarter of 2015 compared with the same period a year earlier. A total figure wasn't provided.

"We have begun and will continue through the first quarter to take the necessary steps to align our costs, inventory and pricing strategy to adjust to the current market," Mr. Jackson said in a statement.

The statement didn't disclose what type of discounting is taking place even as most industry analysts on Tuesday said incentive spending by auto makers as a whole remained under control in December.

The U.S. auto industry posted a record year with 17.5 million new vehicles sold in 2015. The results, reported Tuesday, eclipsed the last sales peak of 17.4 million set in 2000.

Despite the celebration, there were some signs that not everything was right. The industry's seasonally adjusted annual selling pace fell to 17.3 million in December from 18.2 million the month before. It was the first time since August the selling rate had failed to come in above 18 million.

Mr. Jackson said he expects 2016 U.S. industry sales to be above 17 million.

John D. Stoll contributed to this article.

Write to Jeff Bennett at jeff.bennett@wsj.com

(END) Dow Jones Newswires

January 06, 2016 07:15 ET (12:15 GMT)

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