Lexus managing director Tadashi Arashima recently confirmed that the automaker is currently working on a BMW 1 Series competitor that is smaller than the current IS sedan. Although Arashima didn't give any expected launch dates or technical specs for the new baby Lexus, it is expected that it will be rear wheel drive and offer both 4-cyl and V6 engines.
In addition to the new baby Lexus, Lexus is also going to unveil a concept version of a new small hybrid that will be built off the same platform as the next-generation Prius. The new Lexus hybrid will be released by the end of 2009 and will likely feature a larger gas engine than the Prius, either a 2.0L or 2.5L 4-cylinder.
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