* Record Q4 operating profit of 837.2 bln won; beats f'casts
* Q4 net profit nearly quadruples to 945.5 bln won
* Sees 11 pct rise in 2010 vehicle sales to 3.46 mln units
* No special incentives to lure Toyota customers in U.S.
* Shares up 4.1 percent after results (Adds analyst, company comments, shares, background)
By Cheon Jong-woo
SEOUL, Jan 28 (Reuters) - Hyundai Motor posted a record quarterly operating profit as its small cars proved popular with recession-weary buyers and, with Toyota facing an image crisis, the South Korean firm should keep its edge over rivals this year.
Hyundai, the world's No.4 automaker with Kia Motors Corp, is expected to see healthy sales growth this year as economic recovery and new models bolster demand, analysts said, though a firmer won currency and fewer state incentives for car buyers are potential risks.
Hyundai's record earnings came as shares in bigger Japanese rival Toyota Motor Corp fell sharply on concerns about its image and profits after it halted sales of several top models in the United States to fix an accelerator fault.
"Hyundai still has a lot of momentum, particularly compared with Toyota," said Mitsuru Kurokawa, analyst at IHS Global Insight in Tokyo. "They've got a lot going for them: a broad compact car line-up, attractive prices for the quality they offer and clever marketing."
Hyundai was a big winner in 2009 with a shift to smaller cars and government incentives worldwide for car buyers. Popular, low-cost models and sassy marketing helped it grab market share in the United States and in China, now the world's biggest auto market, where its Elantra is the best-selling foreign car.
The expected rise in demand for Hyundai's cars on its improving brand image and quality is likely to offset the hit on export earnings from a firmer won currency, an end to tax breaks for car buyers in Korea and trimmed tax breaks in China.
"There's no doubt Hyundai, to some degree, benefited from a weaker won, and if that trend changes, it may affect Hyundai negatively," said Chang In-Whan, chief executive at KTB Asset Management in Seoul. "However, I think Hyundai Motor is safe till the won-U.S. dollar rate is 1,050 won."
The won last year surged 35 percent from a low against the dollar in March and last traded at 1,150 to the U.S. currency.
Shares in Hyundai were up more than 4 percent after the results, beating the broader market. After big gains last year, the stock has fallen 10 percent this year on worries about the rising won.
Hyundai said it aims to increase sales this year by 11 percent to 3.46 million cars, trucks and buses. Unlike U.S. rival General Motors, it said it would not introduce incentives to lure buyers from Toyota in the United States.
"It is undesirable to link our strategy to the Toyota problems," Park Don-wook, a senior vice president in Hyundai's treasury division, told analysts.
Later this year, Hyundai plans to launch the new Accent and a revamped Elantra, which competes against Toyota's Corolla and Honda Motor Corp's Civic.
Ahead of the earnings, Hyundai was expected to post a 1.4 percent rise in 2010 net profit to 3 trillion won ($2.6 billion), according to a poll by Thomson Reuters I/B/E/S.
The maker of the Sonata sedan posted October-December operating profit of 837.2 billion won, up 44 percent from a year earlier and 29 percent above a consensus forecast on Thomson Reuters I/B/E/S.
Fourth-quarter net profit nearly quadrupled to 945.5 billion won, also well above analysts' forecasts. Sales grew 9.3 percent to 9.65 trillion won. ($1=1153.5 Won) (Additional reporting by Kim Yeon-hee and Jung-youn Park in SEOUL and Ran Kim in TOKYO) (Writing by Sonali Paul; Editing by Jonathan Hopfner and Ian Geoghegan)