Sources close to the assignments said that the business was recently moved into Delphys, a wholly-owned marketing services company of Toyota Motor Corporation, which typically focused on dealer-support activities.
But they were unsure whether the move meant that the Land Cruiser and the Prado would be adopting a lower profile because of the controversy, or if it meant Delphys would be taking a more active role in developing further above-the-line communications.
Sources stressed that there was a clear connection between the controversial campaign and the termination of the contracts. Saatchis, however, retains the Terios account. Dentsu, meanwhile, will continue working on Toyota's two other main brands in China: Vios and Corolla.
According to Nielsen Media Research, Toyota's spend in China last year totalled US$40 million.
One of the offending ads featured a Land Cruiser towing what looked like a Chinese military vehicle, while another showed a pair of stone lions - revered as icons of authority - saluting and bowing to a passing Prado.
Complaints filled internet bulletin boards while newspapers carried stories about the protest after the campaign launched in upmarket magazines just before last Christmas.
Toyota quickly withdrew the ads and made a public apology, stressing that it had no intention of offending the Chinese people.
The sources said that Toyota had reviewed the ads before they launched, but did not consider that the campaign would offend consumers still sensitive about Japan's role in World War II.
Additional reporting by Christy Liu.