Disaster for an advertiser all too often means crisis for an agency, even if the problems have nothing to do with advertising. Such an unfortunate turn of events has ended the 40 year relationship between Asatsu-DK, Japan’s third largest agency, and its largest client, Mitsubishi Motors, who spend at least US$80 million in billings and provided about 20% of operating profits. At the same time, Hakuhodo also lost about US$20 million in Mitsubishi billings.

The winners, Dentsu and Yomiko take over on October 1st. Dentsu will be lead agency for both creative and media, Yomiko handling mainly below-the-line and sales promotion. Advertising in overseas markets and for trucks are both excluded from the switch, but are in review, sources say. Mitsubishi Motors is also Asatsu’s largest international client.

The switch is the largest account move in Japan since Nissan sacked Dentsu in 1992.

Mitsubishi is scrambling to win back customers following its admission last summer that it hid complaints about its cars from government regulators over a ten year period to avoid recalls. The cover-up scandal badly eroded consumer confidence in the brand in Japan where its car sales have declined steeply since the scandal broke.

The ailing automaker is eliminating 9,500 jobs and closing one of four assembly plants in Japan. All suppliers have been told to lower prices by 15% over three years.

A Mitsubishi Motors’ spokesperson said the review began earlier this year as part of a ‘ Turnaround Plan ‘ to ensure the company’s survival and was intended to " increase the strength and enhance efficiency of advertising in terms of the unified tone and manner, enhancement of quality, and brand reinforcement. " Neither Mitsubishi nor Dentsu would comment on reports that Dentsu had promised to cut media costs by at least 15%, compared with Asatsu.

Asatsu executives said the loss would not impact profitability this year, and they hoped it would enable them to win more business from Toyota and Fuji Heavy Industries, both current clients. Though around 100 people worked on the Mitsubishi account, job losses are not expected to be necessary, not even among the 80 people at Asatsu who are related to executives at Mitsubishi Motors, said a spokesman.

The switch is especially good news for Dentsu in the run-up to its expected IPO later this year, showing that the giant still has room to grow domestically and handle even more competing clients auto clients already include Toyota, Nissan (a recent small assignment), Honda, Daihatsu, Subaru, Yamaha, Mercedes, and Ford. Indeed, as Japan’s economy worsens, many advertisers are not only cutting back but also consolidating into the bigger agencies Dentsu is the main beneficiary. Last year, Dentsu increased its market share by 1.2 percentage points to 24.2%; Hakuhodo rose’s by 0.3 point to 12.1%; while Asatsu-DK’s share remained unchanged at 5.6%, due partly to the problems at Mitsubishi Motors.