Lexus, Toyota’s prestige brand, is planning a rival to the Audi A3 and BMW 1-series as part of a major expansion plan. At this stage, the baby Lexus is more an intention than a reality — being at least five years away — but given Toyota’s record there’s a very strong chance that such a model will see the showroom.

Expect a classy, refined hatchback in the mould of the new IS (right) — though it’s not yet clear whether it will be front-wheel drive or rear-wheel drive like the rest of the range.

In the nearer future, Lexus is also planning an estate version of the new IS and, in two to three years’ time, diesel engines for the GS, RX and LS. From next April the new IS will be available with the company’s first diesel, a 2.2-litre four-cylinder unit with 174bhp, and Lexus is planning hybrid versions of all its cars except the IS. The next LS will be more dynamic, both to look at and to drive, in keeping with the marque’s new design strategy.

All these developments are part of Toyota’s ambitious plans to launch Lexus as a prestige brand across the globe. Though Lexus has had considerable success in the US since the 1989 launch of the LS400, sales in Europe have never been strong and the brand is completely unknown in Japan. European sales are forecast to more than double from 25,000 in 2004 to 65,000 in 2010, over half of these expected in the UK.

Lexus is also about to launch in Japan — the cars have previously been sold there as Toyotas — with the simultaneous opening of 180 dealers this August.