How can I diagnose this symptom?

I have recently noticed that the heater blows cold air when on auto mode. If I set the control to hi it will blow good heat. The blower regulates well and all vents are selectable by desired function.
It seems that when in auto mode and the control is set at a set temp the system thinks then cabin is warm inside. I thought first of low coolant or an open thermostat. The engine temp fluctuates between 78-85C by cluster guage which is normal for this car.

Any Ideas?

thanks