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Toyota Motor Corp launched its first dedicated hybrid model under the premium Lexus brand on Tuesday, saying it had received orders worth six months of targeted sales in Japan.

The launch of the HS250h sedan marks the latest push by the world's biggest automaker to drive fuel-sipping hybrids into the mainstream as governments around the world tighten emissions and fuel economy regulations while offering consumers incentives to purchase less-polluting cars.

Toyota expects to sell an average 500 units a month in Japan of the HS250h, which does not have the unique design characteristics of instantly recognizable Prius hybrid, but like the Prius is only available as a gasoline-electric model.

"Thanks to the green-car tax and a hybrid boom fanned by the Prius in Japan, we've already gotten 3,000 orders," Senior Managing Director Toshio Furutani said at the launch.

The model will be sold in the United States and Canada from September, Toyota said. Until the end of 2009, Toyota plans to produce about 3,000 units a month.

Furutani said hybrids had become a major driver for the Lexus brand, which has struggled to sell in Japan since its domestic launch in 2005.

In the first six months of 2009, Lexus sales plunged 38 percent from the year-earlier period to 9,293 units. About 30 percent of those were a hybrid, a Toyota spokesman said.

The HS250h, powered by a 2.5-liter engine, starts at 3.95 million yen ($42,460) in Japan, making it the cheapest model in the Lexus line-up and eligible for a maximum 267,000 yen ($2,870) in "eco-car" tax breaks.

The HS250h has listed mileage in Japan of 23.0 km/liter, comparable to a Vitz subcompact.

HYBRID PRODUCTION IN EUROPE?

Toyota has a goal of selling at least 1 million hybrid vehicles a year within the next few years and has said it would offer the hybrid option on all of its models by around 2020.

Days after taking the helm at the company founded by his grandfather, President Akio Toyoda said last month that Toyota would shift its focus in the diesel-heavy European market to hybrid vehicles as part of a new effort to use its resources more selectively.

Japanese industry daily Nikkan Jidosha Shimbun said Toyota has decided to produce a gasoline-electric version of its Auris hatchback at its British factory around 2012, in what would mark its first locally produced hybrid car in Europe.

A spokeswoman said Toyota could not comment on future product plans.

The Auris, part of the popular Corolla series, was Toyota's third-best-selling model in Europe during the first five months of this year after the Yaris and Aygo subcompact models.

Toyota builds most of its hybrid vehicles in Japan, but also produces a small number of Prius cars in China and the Camry hybrid in Kentucky.

It is scheduled to begin production of the Camry hybrid in Thailand later this month, and in Australia next year. The Prius is also planned for production at a new Mississippi plant but has been delayed due to the economic crisis.

($1=93.02 Yen)

Toyota Motor Corp. and Honda Motor Co., Japan’s two largest carmakers, slowed the decline in domestic auto sales last month as their new hybrid models and government incentives boosted demand.

Sales of cars, trucks and buses, excluding minicars, fell 14 percent to 243,342 vehicles, the Japan Automobile Dealers Association said in a statement today. Toyota sold 110,677 units excluding Lexus brand cars, down 11 percent. Honda posted a 5.7 percent gain, and Nissan Motor Co., Japan’s third-largest automaker, sold 21 percent fewer units.

The pace of decline in auto sales slowed last month from 29 percent in April and 19 percent in May, as government subsidies and tax cuts helped boost sales of Toyota’s new Prius and Honda’s Insight gasoline-electric hybrid cars. Monthly sales may flip to a year-on-year increase as early as August, according to auto consulting company CSM Worldwide.

“The subsidies and tax cuts are kicking in,” said Yoshiaki Kawano, a CSM analyst in Tokyo. “The numbers will improve as gasoline prices were surging around this time last year, putting a damper on car sales.”

Toyota on June 25 said it has booked 200,000 domestic orders for the third-generation Prius, introduced in May. It was Japan’s best-selling standard car that month, surpassing Honda’s Insight.

Under a government program started June 19, consumers can apply for a 250,000 yen ($2,600) subsidy if they scrap a car more than 13 years old to buy a new one and 100,000 yen for a new car purchase without scrapping an old one.

Car dealers have distributed 260,000 applications for the subsidies, Takeshi Fushimi, director of the Japan Automobile Dealers Association, told reporters today. The subsidies are available retroactively for purchases from April 10.

* June 2009 Auto Sales: Toyota Leads Japan Output Drop
* June 2009 Auto Sales: Signals of Auto Recovery
* June 2009 U.S. Auto Sales: GM, Toyota, Ford Lead Top 10 Million Rate

The government expects the incentives to lead to the sale of an additional 690,000 vehicles this fiscal year. Electric, hybrid, natural gas, and some diesel vehicles also qualify for an exemption from the country’s weight and purchase taxes.

Still, domestic sales are expected to be the worst in three decades, as wages fell for a 12th straight month and the jobless rate rose to a five-year high in May. The Japan Automobile Manufacturers Association predicts domestic industrywide sales will drop 8.5 percent to 4.3 million units in the year ending March.