Asatsu hit by $80m Mitsubishi deal loss

<p>TOKYO: Mitsubishi Motors has severed lucrative long-standing </p><p>relationships with Asatsu-DK and Hakuhodo, worth close to US$100 </p><p>million in annual billings for the pair. </p><p><BR><BR> </p><p>The auto manufacturer has hired Dentsu and Yomiko to take over the </p><p>assignments on October 1. Dentsu will be the lead agency for both </p><p>creative and media and Yomiko will handle below-the-line and sales </p><p>promotions. </p><p><BR><BR> </p><p>The switch is the largest account move in Japan since Nissan sacked </p><p>Dentsu in 1992. It comes as Mitsubishi scrambles to win back customers </p><p>following an admission last summer that it hid complaints about flaws in </p><p>its cars from government regulators for over a decade to avoid </p><p>recalls. </p><p><BR><BR> </p><p>The loss will hit Asatsu's bottom line hard as its 40-year relationship </p><p>with Mitsubishi provided about 20 per cent of operating profits. Japan's </p><p>third largest agency is owned 20 per cent by WPP. However, Asatsu </p><p>officials have put on a brave face, saying the loss would not impact </p><p>profitability this year and that they hoped to win new business from </p><p>existing clients such as Fuji Heavy Industries. </p><p><BR><BR> </p><p>A Mitsubishi spokesperson said the review began earlier this year as </p><p>part of its "Turnaround Plan" to revive the ailing car manufacturer. </p><p><BR><BR> </p><p>The switch is a bonus for Dentsu in the run-up to its expected initial </p><p>public offering later this year. It shows that the advertising giant </p><p>still has room to grow domestically and even handle competing clients. </p><p>Dentsu's auto clients include Toyota, a small assignment for Nissan, </p><p>Honda, Mercedes Benz and Ford. </p><p><BR><BR> </p><p>As Japan's economy worsens, many advertisers are not only cutting back </p><p>but are also consolidating business with the bigger agencies. Dentsu has </p><p>been a key beneficiary of this trend. Last year, Dentsu increased its </p><p>market share to 24 per cent, Hakuhodo's share rose to 12 per cent, while </p><p>Asatsu's was static at 5.6 per cent, partly due to the problems at </p><p>Mitsubishi. </p><p><BR><BR> </p>