Lexus’ next all new model could be the smallest, cheapest and biggest-selling yet. Toyota’s premium brand is working on a project to develop a new small, upmarket hatchback to rival BMW’s 1-series and Audi’s A3, Autocar has learned, that is likely to hit the market within the next five years. Lexus has plans to increase sales in Europe to 150,000 by 2015, and says it will need a wider range to achieve this. A smaller, sub-£20k alternative to the VW Golfs and Volvo C30s of this world, if successful, increase sales volumes dramatically, particularly in the hatchback-loving European market. And with Toyota’s smaller mechanicals to call upon as well as its own, Lexus is already in a position to easily produce one. As Autocar understands it, the new Lexus hatchback will be based on an existing front-wheel drive Toyota platform. According to senior Lexus sources, a four-wheel drive option, with a variation of the Lexus hybrid drive used in the RX, is also on the cards. The car would be nominally front-wheel drive with an electric motor at the back driving the rear wheels.