Lexus has thrown down the gauntlet to premier German car makers with a new luxury hybrid model which is set to appeal to company car drivers – but with a lot to commend it to private buyers too.

The sleek GS300h is a big car yet boasts low emissions, which not only means ridiculously low road tax for such a premium vehicle but generous tax concession for the businessman too.

Emitting just 109g/km of CO2 means the GS300h will cost you zero road tax the first year and just £10 in each subsequent years.

Add to that the fact that it will average more than 60 miles per gallon and it’s easy to see why this Mercedes-Benz E-Class and BMW 5 series competitor could make regular German car buyers think again.

Visually the GS300 is identical to the more powerful GS450 launched just 18 months ago, but while the 450 is geared more to performance the 300 offers luxury motoring but with a wary eye on keeping running costs down.

In fact Lexus claims that over three years the new car could save company car drivers more than £7,000 in Benefit in Kind tax compared to premium market hybrid rivals and up to £4,000 over the same period compared to diesel-powered competitors.

The car is powered by a 2.5-litre, 178bhp petrol engine combined with a 105kW, 141bhp electric motor.

At times the wheels are driven by the petrol engine, at times by the electric motor and often by a combination of both. It’s all cleverly worked out by the onboard brain, depending upon what amount of power is needed at any given time.

A display screen in front of the driver shows exactly what’s powering what and when.

The whole thing is mated to an electronically controlled continuously variable automatic gearbox offering completely seamless changes.

Lexus GS 300h
Lexus GS 300h

And while it might all sound a bit involved and complicated, for the driver nothing could be further from the truth. The GS300h offers some of the most relaxed, laid back motoring it’s possible to experience.

On the road the luxury car purrs along in silence eating up the miles. All Lexus models are noted for being quiet but this one takes silence to a new level.

Just occasionally when you really do push the accelerator down hard you hear a slight increase in noise level but even then it’s barely perceptible.

You can drive the car in eco mode, normal or Sport. Step up to the higher grade F Sport and Premier models and you get Sport Plus too, and every category does exactly what it says on the tin, with Sport and Sport Plus sharpening up the throttle and steering responses.

While in eco and normal the dial in front of the driver is split into three zones – charge, eco and power – but as soon as you switch to Sport mode the dial cleverly disappears to be replaced by a rev counter.

Alongside this is a conventional speedometer, although the car also boasts a head-up display which projects the speed into the windscreen so you don’t have to take your eyes off the road.

Other features worthy of note are a reversing camera, rear cross traffic alert – which uses radar to warn the driver of vehicles approaching from the sides when reversing – and the optional Lexus Hotspot which provides everyone on board with an independent WiFi connection.

Four trims levels are available, starting with the entry level SE at £31,495. The SE boasts a 0-62 miles per hour time of 9.2 seconds and a top speed of 119mph.

The GS300h is available to order now ready for delivery in January.