STUTTGART—Daimler AG expects significant growth in vehicle sales in 2012, but the German auto giant's outlook for earnings remains more cautious as it invests heavily in new production facilities and a wider range of cars and trucks amid a mixed global economic outlook.

"We will make substantial investments in our future this year—in new products, new technology and new markets," Daimler Chief Executive Dieter Zetsche told reporters at a press conference.

"Although these efforts will have a positive medium-term effect, they will burden our finances somewhat this year," Mr. Zetsche said. Daimler "will strive" to achieve earnings similar to last year's level.

The goal of keeping 2012 profits stable was welcomed by analysts as many of them had anticipated an earnings slowdown after Daimler's record earnings last year, reported The Wall Street Journal.

Fourth-quarter net profit attributable to shareholders rose 63 percent on the year to €1.72 billion ($2.28 billion). Daimler's closely-watched earnings before interest and tax, or EBIT, increased 39 percent year-on-year to €2.18 billion in the fourth quarter. Revenue improved by 10 percent to €29.1 billion.

Daimler said it will increase investment in research and development and new property, plant and equipment by €3.2 billion to €21.5 billion over 2012 and 2013 compared with the period 2010 to 2011.

The group confirmed it plans to open a new engine-making factory in China. It is continuing to expand its line-up of Mercedes-Benz cars including new models at the top end of the range. More versions of its S-Class sedan and a new sports utility vehicle will be launched in the coming years with a hatchback version of its CLS luxury sedan due this September.

The world's third-bestselling luxury-car maker and largest truck maker by revenue proposed a dividend of €2.20 a share for 2011, up 19 percent from the previous year and a more generous payout than analysts expected.

"We expect dividends to continue to steadily improve in the coming years," Mr. Zetsche said.

The core Mercedes-Benz Cars unit, which comprises the Mercedes-Benz, Smart and Maybach brands, contributed €1.23 billion to fourth-quarter EBIT after €1.18 billion in 2010. Mr. Zetsche said Daimler targets at least 1.5 million annual car sales from 2014, more than 1.6 million as of 2015 and reiterated that it aims to regain the industry's top spot by 2020. It sold 1.38 million cars last year.

Daimler said "unit sales will increase again significantly this year and... revenue will continue to grow".

Daimler shares were up 3.5 percent at €46.24 around 1055 GMT on the Frankfurt bourse.

The auto group's results were "bang in-line," said Sanford Bernstein analyst Max Warburton. The key Mercedes-Benz division was in-line with an 8.2 percent profit margin, Mr. Warburton wrote in a note to clients.

While Daimler's trucks unit wasn't quite as profitable as expected, the shortfall "was made up by the bizarrely profitable vans business" and buses, he said.

"There don't seem to be many funnies in these numbers, unusually for Daimler, and cash conversion looked good," Mr. Warburton said.

Though Mercedes-Benz notched up solid growth in both sales volumes and profit last year, driven by surging demand particularly in China and the U.S., it was outshone by German rival BMW AG, which remained the world's best-selling premium car maker while reaping fat profit margins at the same time, due partly to a more streamlined cost base.

Volkswagen AG's Audi brand also overtook Mercedes-Benz as the world's second-best-selling premium brand in 2011 and posted higher profit margins as well.

Daimler shares were hard-hit during last year's stock market rout, but regained some ground since the beginning of the year amid a gradual recovery of the overall market. Daimler stock gained around 29 percent since beginning of January, in line with a 26 percent raise of the EuroStoxx Automotive & Parts sector index.