Lexus sales are suffering as consumers shy away from luxury vehicles as they tighten their belts.

The admission comes from Miguel Fonseca, UK managing director of Lexus and Toyota in the UK, who said sales of Lexus' petrol-only versions of its RX were particularly disappointing. Fonseca said: "The luxury market is down and the only part of it where sales are increasing is in the medium-size C-segment.

“Unfortunately we do not have a C-segment car and our year-on-year Lexus sales in the UK are 20% down and are expected to fall to 12,500 sales this year against 15,000 in 2007.”

Fonseca said Lexus was working with its UK dealers to get the balance right and concentrate on its service and aftersales business. Fonseca said: “We do have very good customer loyalty in terms of people bringing their cars back to dealers."

On the credit side, the Toyota brand is doing well and demand for the Prius hybrid is outstripping supply. Fonseca said the company will sell a record 9,351 of the models this year.

He added: "We could sell more but we can't get enough of them."

Toyota has scrapped plans to build sport utility models at a new North American factory, opting instead to assemble Prius. "That will open up more allocation for us from the factory in Japan," added Fonseca.