Lexus is unlikely to launch a model positioned below the IS250 in the United States but that doesn’t mean it won’t develop a new entry-level car for other markets. One possibility is Europe, where premium hatchbacks sell in substantial numbers.

The carmaker’s executive vice president Tokuichi Uranishi has previously hinted that a model positioned below the current IS could be launched to help reach an internal goal of 150,000 sales in Europe by 2015. And recently, the managing director for its European division, Tadashi Arashima, confirmed that Lexus will eventually launch a new compact car to rival the likes of the BMW 1-series and Audi A3.

Now, after speaking with the carmaker’s Australian chief, John Roca, GoAuto is reporting that the upcoming compact car will feature a hybrid option. This fits in perfectly with Lexus’ strategy to differentiate itself from its premium rivals by offering more hybrid models.

Roca told reporters that the car "will come", but the timing is uncertain with a 2011 launch being the most tentative guess possible.

Lexus is calling its junior model the C-Premium internally, and there’s some speculation that it could go by the name ‘BS’ once on sale. The car’s development is still in the early stages, with options such as whether it will be rear or front-wheel-drive still up in the air. One possibility is that it will share its platform with the next-generation IS due in 2012, which gives rise to the hope that there could be a hybrid variant of the new IS as well.

On top of petrol and hybrid powerplants, the C-Premium is also expected to get a diesel engine for the European market, but whether or not the oil burner will make it to other markets remains uncertain.

Lexus has been selling cars in Europe since 1990 but it still commands less than 1% of the total market, something the company hopes to change with the introduction of a more affordable and more fuel-efficient model.