According to reports, Lexus is set to unveil a concept at this September's Frankfurt Motor Show that points the way to a new hatchback designed to compete with the likes of the BMW 1-Series and Audi A3.

The hatch is to be based on the US-market only Lexus HS250h, and is expected to be called either the BS or CS.

Additionally, the car will be front wheel drive, and be powered by a 2.4 litre four cylinder hybrid-petrol engine similar to that found on the HS250h. With both petrol and electric power combined, it is expected to produce up around 187bhp.

A production version of the new hatchback is expected to be shown at the Geneva Motor Show next year, with sales to begin towards the end of 2010.