SEOUL—South Korean car maker Hyundai Motor Co. on Thursday posted a 38 percent increase in its fourth-quarter profit as higher overseas sales, gains from shareholdings in its affiliates and a weaker local currency that helped exports buoyed its bottom line despite a fall in domestic sales.

Consolidated net profit for the three months ended Dec. 31 rose to 2.002 trillion won ($1.79 billion) from 1.451 trillion won a year earlier, the company said in a statement. Overseas sales rose 23 percent, while domestic sales fell 5.8 percent during the period, it said.

The company said it is targeting a 5.7 percent increase in total sales to 4.29 million vehicles this year, though external uncertainties may slow sales growth, The Wall Street Journal.

To weather the global economic slowdown and the continuing European debt crisis, "we will keep inventory low across markets and continue offering limited buying incentives [particularly in the U.S. markets]," Chief Financial Officer Lee Won-hee said in a briefing on the quarterly results.

In 2011, Hyundai offered the industry's lowest incentives of $1,005 per vehicle in the U.S., though its U.S. market share rose to 5.1 percent from 4.6 percent.

Mr. Lee said more vehicles based on integrated platforms, where different models are manufactured using the same underpinnings, would help cut manufacturing costs further. Global sales from vehicles with integrated platforms represented 60 percent of total sales in the fourth quarter, up from the previous quarter's 57 percent, Sanjeev Rana at Deutsche Bank said in a research note.

Hyundai is targeting sales of 675,000 units this year in the U.S., which would be an increase of 4.5 percent. It plans to launch four new models there in 2012: the Azera sedan, the Santa Fe sport-utility vehicle, the Elantra Touring hatchback and the Elantra two-door subcompact.

For the whole of 2012, the company aims for a 15.4 percent increase in European sales to 456,000 units, helped by the launch of the i30 and i40 hatchbacks, and a 6.8 percent rise to 740,000 units in its Chinese sales. Mr. Lee forecast a strong comeback for Japanese car makers in major markets. However, he said he doesn't expect another year of double-digit sales growth for China's passenger car market due to the slowing economy there.

Contributions from Kia Motors Corp. and other affiliates soared 43 percent to 2.404 trillion won in 2011.

Operating profit jumped 72 percent to 2.127 trillion won in the quarter ended December from 1.237 trillion won, while sales were up 11 percent at 20.519 trillion won from 18.540 trillion won.

The company also cited the weaker Korean won as a factor in its improved performance.

The dollar traded at an average of 1,144.75 won in the quarter compared with 1,132.77 won a year earlier, according to the Bank of Korea.

For the whole of 2011, net profit climbed 35 percent to 8.105 trillion won from 6.001 trillion won in the previous year. Operating profit rose 36 percent to 8.075 trillion won and sales were up 16 percent at 77.798 trillion won.

"As Hyundai's average selling prices are on the rise due to its well-diversified product portfolio, its total sales are expected to rise by at least 10 percent this year despite the conservative target of selling 4.29 million units," said Jeff Lee, an analyst at NH Securities.

Hyundai said it would pay 480 billion won in year-end dividends on March 16.