Just two years ago, the Colt Car Company, Mitsubishi Motors UK importer, was losing £10m a year as sales slid and stocks built up, managing director Jim Tyrrell told journalists at the British motor show in Birmingham.

When Tyrrell took over the helm of the Cirencester-based company two years ago he implemented a ‘back to basics’ policy starting with price cuts of 15%.

He simplified the product range, taking out up to 75% of the product complexity, and took £4m out of the company cost base.

“We also went back to selling cars the traditional way, through dealers and making sure that the dealers were profitable.”

Sales in 2000 were just 18,000 units but this year Tyrell is forecasting 26,000 sales, nearly all through the more profitable retail side of the business rather than selling discounted cars to fleet customers.

“The sales performance has driven a turn-around in the company’s profitability and having made a small profit last year we are now on track for a good profit this year,” Tyrrell said.

But all the efforts to return to profitability could be wiped out by the impending European end-of-life vehicle directives which have the full backing of the UK government.

This makes manufacturers and their importers responsible for the disposal of all vehicles registered after July 2002.

From 2007, car makers become responsible for the disposal of all their vehicles, no matter when they were first registered.

Tyrrell estimates that Mitsubishi Motors UK has 160,000 vehicles on the road – a £16m liability.

There were another 150,000 unofficial or ‘grey’ imports which would cost another £15m to dispose of. “We will not be picking up this bill, even if we have to go to court to defend our position,” he said.

He called on the government to make end users responsible for disposing of their cars, just as they were responsible for disposing of all their other possessions. The cost to the Government was the equivalent of adding £3 to the annual road fund licence.