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Lexus is unlikely to launch a sub-$30,000 model in the U.S. but that doesn’t mean it won’t develop a new entry-level model for other markets. One possibility is Europe, where small cars like BMW’s 1-series and the Audi A3 sell in substantial numbers, and according to a new report Lexus will have a competitor for its German rivals as early as next year.
Toyota exec Tokuichi Uranishi has previously revealed that Lexus could develop a new entry-level model for Europe to help reach its European sales target of 150,000 vehicles by 2015 – information that was backed last year by Lexus’ Australian chief John Roca.
Britain's Top Gear is now reporting that Lexus will have a concept version of its 1-series rival on show at September’s Frankfurt Motor Show, ahead of a market launch due sometime next year. One important distinction will be that the new Lexus model will be a dedicated hybrid based on the 2010 Toyota Prius.
Designed to compete with Germany’s highly efficient four-cylinder diesel lineup, the new car will be a compact hatchback with FWD and be priced cheaper than the current Lexus IS 220D.
Source: Report: Lexus to tackle 1-series in Europe with Prius-based hatchback - MotorAuthority - Car news, reviews, spy shots

