New Lexus grabs a piece of the premium action

It seems the BMW 520d is now as common a sight in south Dublin as a Toyota on a taxi rank. The race for volume by the premium brands, and the disappearance of alternatives such as Saab, must provide succour to a niche brand like Lexus. Even in the face of such German domination, there are moneyed buyers on the lookout for alternatives. Whisper it quietly but dealers are starting to get giddy about the 2014 new car market, with orders for new year sales well ahead of expectations.

Things are looking up at the premium end of the market as well, and Lexus is lining itself up for a slice of the action. With its limited portfolio of models and just four dealers in the Republic, its product offensive will be focused on the core formats sought by Irish premium car buyers: mid-size and larger premium family saloons.

That's not to say Lexus got its positioning right in the past. The reasons its volumes are so low compared to rivals are manifold, and are rooted in decisions being made in Japan and a bias towards US buyers. It spent the recession with a range of models largely out of sync with consumer demands and budgets. Even its supposed family hatchback entrant, the CT 200h, can't match the discounts and offers from German rivals. And it has a fundamentalist devotion to petrol hybrid powertrains, which leaves no room for diesel variants at present.

First up was the revived IS, aimed at the likes of the BMW 3-Series and Audi A4. Then there is the GS range, pursuing BMW 5 Series owners. That larger GS 450h iteration is supposedly an alternative for buyers considering a premium German 3-litre diesel. In reality it's an alternative for LS owners wishing to downsize but also to retain the luxury touches. That's why the few that have been sold are loaded with equipment.

The GS 300h is meant to give the Germans a real fight at the heart of the segment. Plans for 100 sales next year don’t seem that outlandish.

Premium features
Inside the car, the cabin is awash with premium features. From the leather stitching on the dash to the 12-speaker stereo, heated and cooled electric front seats, and little features like the smooth one-touch indicator, there's a sense that Lexus has gone a step further in making the cabin more luxurious than any of its bigger-selling rivals. There are still issues with the plodding nature of the firm's Remote Touch controls, but even on entry-level grades this car looks and feels plush on the inside. And of course this generation of GS hybrid comes with a full-sized 468-litre boot.

Underpinning the GS 300h is a 2.5-litre four-cylinder petrol engine putting out 181bhp and mated to a 105kW/143bhp electric motor that combines to create a total output of 223bhp.

Our problem with the GS 300h is the same as we have with this powertrain on the IS: its Electronically Continuously Variable Transmission (ECVT). This automatic box isn’t quick enough to make the most of the engine’s power, forces a monotonous drone from the engine when the throttle is worked hard and just doesn’t get the most out of the 223bhp on offer. Even in “Sport S+” mode on the racier F-Sport version, when every other element is tuned to performance, the ECVT still seems fixated on economy.

Drive it smoothly and relaxed and the GS is a kitten. But it lacks claws when you kick down. Part of the issue is undoubtedly to do with a seeming lack of mid-range torque, at least compared to diesel rivals. It may have 223 horses to call upon but they don’t kick down as hard as similarly powerful diesels. When overtaking in a diesel rival you know that keeping the revs between 2,000rpm and 4,000rpm gets the most punch out of the engine, but while the power in the GS 300h is smoothly aligned and peaking at 221Nm, after 4,200rpm it noticeably lacks the thrust I’d like in a premium car of its size to quickly and comfortably speed past slower traffic.

Crying out for torque
There's no question the chassis is good enough to cope with a lot more power and it wasn't troubled once by the tight and tricky sloping bends on the narrow back roads that featured on our test route. It seemed to be crying out to the powertrain to keep up and give it some torque to work with. The steering is light but well in tune with what's going on down on the tarmac, while the suspension is incredibly quick to react to changing surfaces and quick turns. Lexus still has a lot to do to dent the fortunes of its German rivals, particularly here. A smaller SUV competing against the BMW X3 and Audi Q3 and Q5 is in the pipeline but needs to be rushed to market. Work is underway on a sports car to be created in a joint venture with BMW.

Speaking at the launch of this latest GS, Hideki Watanabe, chief engineer for GS and LS models, talked about the importance of Europe as a focus for engineers in terms of meeting demanding customer requirements. Yet, for all the kind words, the US is clearly Lexus's favoured child. The lack of diesels and the decision not to make an estate variant – a format that represents more than half of all sales by rivals in continental Europe – suggests it doesn't listen as closely to our wishes as it says it does. Questions also have to be asked about its seemingly fundamentalist hybrid ethos. For a firm that wants to be seen as a pioneer of hybrid technology, it's missing a trick by not adopting a plug-in hybrid variant in the range.

In-house wherewithal
Toyota has the technology and wherewithal in-house, as demonstrated on the Prius plug-in model, albeit with limited production numbers. So why not roll it out on a premium model to a market less sensitive to the extra costs and probably more eager to showcase the latest tech? After all, German rivals like BMW and Audi are already stealing some of the hybrid thunder with their own versions. A plug-in would be the way to stake a new claim as the hybrid leader. And for all that devotion to electric, if a high-powered rival to BMW's M5 is built – which seems likely now – it will have a traditional powertrain under its bonnet.

The new GS300h offers a sort of alternative to the car parks of BMWs, Mercs and Audis out there. And it's arguably more premium both in badge and interior trim on a price-for-price basis. With a price tag starting at €49,950 it's not a bargain buy, but, pitted against a €48,219
BMW 520d SE or a €49,690 Audi A6 2.0 TDI S Line, it does seem to be worth some consideration.