Toyota posted a third straight year of record first-quarter net profit on Tuesday, easily beating analyst estimates, as costs cuts and currency gains made up for slightly weaker vehicle sales.

April-June profit jumped 10 per cent to 646.39 billion yen ($5.22 billion) versus the 607.5 billion yen average estimate of 11 analysts polled by Thomson Reuters. Operating profit rose 9.1 per cent to 756 billion yen on revenue that grew 9.3 per cent.

Toyota's sales growth continued to be held back by a self-imposed halt on increasing production capacity aimed at preventing quality problems. Thecar maker lifted the three-year freeze in April with plans for plants in Mexico and China.

Sales in China, the world’s biggest auto market, have also been hit by intensifying price competition, especially for the RAV4 sport utility vehicle (SUV) as car makers seek to capitalise on a vogue for SUVs.

Toyota’s sales with its Chinese joint ventures declined 0.1 per cent in January-March. That featured in Tuesday’s earnings as Toyota reports Chinese income one quarter later, and books them at net level under US accounting rules.

In April-June, Toyota’s global retail sales slipped 0.4 percent to 2.502 million vehicles.

The Japanese car maker left its net profit forecast for the year ending March unchanged at 2.25 trillion yen, and raised its revenue guidance slightly to reflect higher-than-expected currency gains.

Toyota’s shares closed down 1 per cent ahead of the results, while the broader Tokyo market ended flat.

Reuters