Japanese car giant Toyota is launching a major assault on the European luxury car market with a €500 million ($650m, £350m) push for its Lexus brand.

The company plans to increase Lexus sales to 100,000 cars a year by the end of 2010, supported by a fivefold boost in marketing spend to between €150m and €170m and helped by the launch of a diesel-engine model in 2006 and sportier designs.

Europe is the world's largest market for luxury cars with between 45% and 50% per cent of sales, but so far the Lexus brand has failed to make an impact. It has only sold around 25,000 cars a year.

Says Stewart McCullough, director of Lexus Europe: "The issue we have had in the past is that we didn't have a range of cars tailored to the European market. This is the first serious step change in the Lexus business in Europe."

Toyota successfully launched the brand in 1989 in the US and sold 260,000 cars there last year. Lexus is estimated by analysts to generate a quarter of Toyota's overall profits, in spite of providing only small percentage of total sales.

Creative work for advertising the brand in Europe is done by Team One Europe, which was awarded the business in April this year.

Data sourced from Financial Times online; additional content by WARC staff