It's lonely at the top.

Inroads in the U.S. market made Toyota Motor the biggest automaker in the world, outselling General Motors this year for the first time. But the same U.S. market—and the weakness of the dollar against the yen—has dragged down Toyota's profit.

Toyota reported that fourth-quarter earnings fell 28 percent, to $3 billion. The company also forecast its first annual profit decline in seven years.

The company is battling rising prices for raw materials and a dollar that has fallen more than 10 percent against the yen this year. At the same time, the North American market, which accounts for a third of Toyota's overseas profits, is being buffeted by an economic downturn and auto sales overall are slowing. And sales in its home market have been falling as Japan's population shrinks.

For its next fiscal year, Toyota expects earnings to slump 27 percent, to 1.25 trillion yen, or $12 billion, on revenue of 25 trillion yen. Global vehicle sales are projected to rise only 1.6 percent next year, to 9.06 million.

"We are facing a severe business environment, Katsuaki Watanabe, Toyota's president, said. "However, Toyota considers this headwind as a valuable opportunity to turn it into a more flexible and stronger company."