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.

Set for a possible production debut at the 2010 Geneva Motor Show, the new hatch would do battle at the entry-level end of the market, potentially leaving room for the rumored IS-based hybrid also headed to Europe in the next several years. The latest info, from Edmunds, follows along the lines of several earlier reports of a coming entry-level Lexus.

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 reported in May that Lexus will have a concept version of its 1-series rival on show at September’s Frankfurt Motor Show, ahead of its market launch next year.

One important difference between the two reports, however, is that the previous report pegs the new Lexus as a dedicated hybrid based on the 2010 Toyota Prius. The latest news reveals no details of the car, but neither does it mention plans for a hybrid.

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. The aforementioned Lexus IS hybrid also thought to be under consideration for Europe would likely slot it somewhat above the entry-level IS models, doing battle instead with the competition's V-6 diesels.