Toyota Motor Co sold 72,100 cars in China in August, 4.2 percent lower than last August, indicating that the company has not fully recovered from the shadow of the Diaoyu Islands dispute, Reuters reported Monday.

After year-on-year sales growth of 9 percent in June, Toyota's recovery went into reverse in July and August.

Sales in July fell 3.5 percent year-on-year, according to the report.

From January to August, Toyota's sales in China reached 564,600 automobiles, 5.3 percent lower than in the same period last year.

Considering its performance so far this year, it will be hard for the company to meet its 2013 sales target of selling 900,000 autos in China, which would represent a 7 percent year-on-year increase, the report said.

Japanese car firms used to be among the strongest foreign players in China, but their performance has been dampened since Japan's announcement in September 2012 that it was "nationalizing" the Diaoyu Islands.

The announcement triggered strong anti-Japan sentiment among Chinese car consumers and sales plummeted.

The market share of Japanese cars fell from over 20 percent at the beginning of 2012 to around 13 percent in September 2012.