LEXUS LOOKS SET to up the ante in its never-ending quest to upstage its German rivals, with British publication Autocar reporting that the Japanese luxury marque is prepping a 1 Series-fightin’ five-door hatchback for a debut at the Frankfurt Motor Show in September.

The hatch is expected to be built on a new platform separate to that of the Prius-derived HS 250h, but drawing power from the same petrol-electric hybrid powertrain.

The Lexus hatchback, rumoured to use a ‘CS’ nomenclature, is intended to do battle with the dominant turbodiesel hatches in the C-premium segment, namely Audi’s A3 and BMW’s 1 Series.

Unlike the Prius, the Lexus hybrid will be tuned with a greater emphasis on power rather than efficiency, however expect it to still be relatively frugal.

Styling is a mystery for now. Various renderings have been doing the rounds of late, but we’re told to expect it to share none of its sheetmetal with its HS 250h sibling (above). If the rumours are true, then all will be revealed at Frankfurt.

The as-yet unnamed Lexus hybrid hatch is expected to go on sale in Europe sometime in 2010, with a pricetag of around £20,000 (AU$40,000).

Lexus Australia CEO John Roca believes that a Lexus that sits below the IS 250 in size and price would be perfect for Australia. He notes that younger buyers are more open to and knowledgeable of the Lexus brand as a luxury badge, while older buyers are more traditionally inclined to favour European luxury brands.