AutoNation will cut new vehicle orders -CEO

(Adds CEO comments on new vehicle orders, inventories, costs.)

By Joseph White

Jan 28 (Reuters) - AutoNation Inc Chief Executive Mike Jackson told Reuters on Thursday the U.S. auto retailer will cut new vehicle orders as part of a push to reduce its stocks of unsold vehicles by 10 to 15 percent this year.

Jackson said AutoNation's inventories of unsold vehicles are 13 percent higher than a year ago, and contributed to the No. 1 U.S. auto retailer's weaker-than-expected fourth-quarter results.

"In a growing market you can be aggressive," Jackson said in an interview. "Once you hit a plateau you have to bring those inventories into line. We have changed our forward orders" for new vehicles.

AutoNation earlier on Thursday reported net income of 87 cents a share, down from $1.02 a share a year earlier. Revenues rose nearly 6 percent in the quarter to $5.34 billion, but steeper price cuts, particularly for luxury models and smaller cars, hurt profits, the company said.

Jackson has pressured automakers to hold vehicle production and inventories in check before, using his platform as head of the largest U.S. auto dealership chain with 342 new vehicle franchises.

With gasoline prices low, truck and sport utility vehicle sales remain strong, Jackson said. But demand for smaller, Asian brand cars is weak. Luxury vehicle demand was also weaker than AutoNation expected in the fourth quarter, Jackson said. Profits from the chain's luxury brand stores fell by 10 percent from a year earlier, he said.

Falling sales in Texas, where low oil prices have hurt the state's petroleum industry, also dragged on AutoNation's performance, the company said.

AutoNation shares tumbled 7.1 percent to $40.93 in morning trading on the results, which fell short of analysts' expectations.

Jackson said the company will move to cut marketing and staffing costs in addition to cutting vehicle orders and managing down inventory.

U.S. car and light truck sales should stay at relatively strong levels in excess of 17 million vehicles for 2016, Jackson said. However, he said the second half of this year could be more difficult than the first half. AutoNation will push to reduce inventories during the first half of the year, he said.

(Reporting By Joseph White, additional reporting by Yashaswini Swamynathan in Bengaluru; Editing by Meredith Mazzilli)