Lexus C-Premium for Oz

IT IS official: Lexus Australia will add a compact front-wheel-drive hatchback to its range within two years, priced under $50,000 to compete directly with BMW’s 1 Series and the Audi A3.

The bold small-car plan, which will finally give the Japanese premium brand a smaller model than the IS250 sedan, is designed to rival the volume-selling compact vehicle ranges from the established German luxury brands.

News of the first compact Lexus first emerged at the 2007 Tokyo motor show, when GoAuto revealed the project’s codename as C-Premium, and UK Lexus sources have now confirmed the model will be a five-door C-segment hatchback to be officially named ‘BS’ or ‘CS’.

Autocar reports that the new model will make its global debut as a concept at the Frankfurt motor show in September, before appearing in final production trim at Geneva next March.

A European release is believed to have been slated for shortly after that, but Lexus Australia chief John Roca has now confirmed the brand’s new entry-level model will go on sale here in early 2011.

“The C-premium we’ll get for sure,” he told GoAuto at this week’s IS250C launch. “Timing wise, it will be here by early 2011.”

From top: Lexus IS250, Lexus ISF, Lexus IS250C.

Contrary to overseas reports, the C-Premium is unlikely to be a dedicated hybrid model like the larger Camry-based 2.4-litre HS250h sedan, which is already on sale in the US and was last week confirmed for sale as a right-hand-drive model in Japan.

Lexus Australia has also requested a version of the four-door HS for Australia but is not hopeful of a positive outcome. In fact, Lexus already faces a potential battle to position the C-Premium hatch in its local range, which currently opens at $58,990 for the IS250 Prestige sedan.

It hopes to price a conventional petrol-powered model between $45,000 and $50,000, which would position it between both of Toyota’s new Prius hybrid hatch variants ($39,900 and $53,500) and make it a rival for Audi’s five-door A3 range ($37,200-$53,200) and BMW’s five-door 1 Series line-up ($41,100-$63,065).

But a hybrid version of the small hatch, not to mention the HS250h, would push pricing into IS250 territory.

“It has got to be sub-$50,000 – that’s what we need,” said Mr Roca. “If we could bring it in at the right price it would be great for the brand. The whole idea of having that car is to get some (sales) volume over and above IS.

“When you’ve got an IS that starts in the late $50,000s, you’d assume that to introduce the C-Premium it will have to be priced in the late $40,000s.

“And if you can do that with a Lexus badge in that category you’d be cooking with gas because it won’t be a 1.2 turbo – it will be a 2.0-litre minimum, or a 1.8 or 2.4 hybrid. Consider what the IS does and if you can get the weight out, it will be a pretty cool little gadget,” said Mr Roca.

The smallest current Lexus, the IS250, is powered by a 153kW/252Nm 2.5-litre V6, but the C-Premium is expected to come with both 2.0-litre petrol power and a hybrid drive system borrowed from the new Prius, which employs a version of the Corolla’s 1.8-litre four-cylinder.

Mr Roca downplayed concerns that the engine, which has been criticised for being too noisy, would not be suitable for a Lexus.

“If they go to that market with that engine in the Lexus I’m confident they’ll get it right,” he said. “The other alternative is they could go to the 2.4 (which powers the HS250h and next February’s Ausrtralian-made Camry Hybrid), but I think that would price it out of the market.

“It would also be crossing into IS territory. But, who knows, because the next-generation IS may come with a larger engine, allowing the (C-Premium) to be a larger car with a larger engine,” he said.

Lexus has also defended its decision to build what will be its first front-drive passenger car in the C-Premium hatch, which was widely expected to employ the traditional rear-drive Lexus sedan layout but will instead be based on the same fundamental chassis architecture as C-segment vehicles such as the Corolla and Prius, and the RAV4 compact SUV.

Some industry observers had expected the C-Premium to be based on the same rear-drive platform that will underpin the next-generation IS, production of which has been pushed back from 2011 to 2013 to develop the new small-car. But now it seems the C-Premium will not match the configuration of the rear-drive 1 Series but mimic the front-drive A3’s instead.

“We never said it was going to be rear-wheel drive,” said Toyota Australia’s corporate manager of product planning, Peter Evans, who will seek to view the C-Premium model in Japan for the first time this week.

Mr Roca said Toyota in Japan was paranoid about the crossover between Toyota and Lexus, so, if anything, they would over-engineer and over-produce in terms of quality for the C-Premium.

“They are concerned about being accused of producing a Corolla type of car, so I think they will deliver a Lexus type of car,” he said.

After initially ruling out a compact SUV, it is believed the Lexus small-car project included the development of seven separate body styles before the five-door hatchback was formally locked in late last year. Just as the mid-size front-drive HS250 hybrid sedan was developed primarily for the US, the smaller front-drive C-Premium hatch will be aimed mainly at Europe.

“They couldn’t decide which way to go between a sedan or a hatch,” said Mr Roca. “Now they’ve decided it will be a hatch, which I think is the way to go. The Europeans want a hatch badly.

“That segment and compact SUVs are going berserk in Europe, and we don’t currently play in either segment.” Mr Roca said it was unlikely the first Lexus hatchback would be a dedicated hybrid model.

“I though it was both – hybrid and non-hybrid,” he said. “Maybe the Europeans are saying dedicated hybrid because that’s what they want, so maybe if there are two versions they might just be taking the hybrid.

“Eventually we’ll have hybrid right across the range, but whether we start as a dedicated hybrid (for the C-Premium) here will be interesting, because everything I’ve heard is both hybrid and non-hybrid. A dedicated hybrid would surprise me and a lot of other people.

“It wouldn’t surprise me if they used the Prius engine, but it would surprise me if that was the only engine. If it’s not dedicated (hybrid) then it may not be the Prius engine, but if it is I think it could be.”