Berkshire Hathaway (NYSE: BRK.A) has been in the auto dealership business for about a year now, and value investor Mario Gabelli said Friday that Warren Buffett might want to consider buying AutoNation (NYSE: AN).

"If you want a big elephant, there's a 100 million shares of AutoNation" with a market value of more than $5 billion, Gabelli told CNBC's " Squawk Box " in a wide-ranging interview from Omaha, Nebraska, a day before Saturday's Berkshire shareholders meeting.

In 2015, Berkshire completed its acquisition of Van Tuyl Group, which at the time was the nation's largest privately held car dealership chain. The new company was renamed Berkshire Hathaway Automotive.

When the deal was announced in 2014 , AutoNation Chairman and CEO Mike Jackson emailed CNBC to say congratulations to Buffett. Jackson wrote: "Welcome to the retail auto business."

Gabelli, chairman and CEO of Gamco Investors (NYSE: GBL), was quick to tell CNBC on Friday he's "not suggesting anything" between AutoNation and Berkshire Hathaway Automotive was in the works. "I'm observing," he stressed.

Gamco owns more than 1 million shares of AutoNation, according to regulatory filings. The firm has owned a position in AutoNation since 2001.

Gabelli, who's been attending Berkshire's annual meeting for years, started buying Bershire's Class A shares some 30 years ago, when they went for about $2,000 each. As of Thursday's close, the stock was worth more than $219,000 per share, up more than 10 percent this year.

That far outpaces the 1.5 percent advance of the S&P 500 (INDEX: .SPX) index in 2016.

— Programming note: Warren Buffett appears on CNBC's "Squawk Box" for three hours on Monday, starting a 6 a.m. ET. From 8 a.m. ET to 9 a.m. ET, Microsoft co-founder Bill Gates, a Berkshire Hathaway director, and Charlie Munger, vice chairman of Berkshire, join the conversation.

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