WITH a brand image and reputation for customer satisfaction and reliability that has taken the luxury car market by storm since launch just 10 years ago, it went without saying that Lexus would seek to expand its customer base with a new, smaller, car to augment its mid-size and large luxury saloons. And here it is: the IS200 is the third model in the range and, Lexus hopes, the key to significant expansion in the UK.

Aimed directly at the likes of the BMW 3-series, Audi A4 and Mercedes C-class in the D-segment, the IS200 brings with it the brand's core values, but opens a new chapter for the company in terms of market perception. To succeed in its 5,100 sales prediction for 1999 and compete on level ground with its rivals, it will need to create a new image that is removed from the 'boardroom favourite' picture painted by the LS400 and GS300. Its credentials seem up to the task: pricing that undercuts virtually all its competitors goes hand in hand with a standard equipment list that wants for little, even on the entry model.

Lexus has looked hard at the 3-series in the design of the IS200. Similar proportions, a front engine/rear-drive lay-out, styling cues reminiscent of both the BMW and Mercedes, plus an emphasis on sporting appeal are aimed at enticing a youthful new customer base. Technical sophistication in the shape of a 2.0-litre 150bhp six-cylinder engine and six-speed manual gearbox are unique at this price and the styling is aggressive compared with the relative sobriety of the Germans.

Three models are on sale - S, SE and Sport - all powered by the same six-cylinder engine with six-speed gearbox. A four-speed automatic option is available on S and SE levels at ú1,195. Prices start at ú20,500 on the road for the S, rising to ú22,000 for the SE and top out at ú23,000 for the Sport, placing the IS very competitively within the sector. A BMW 318i SE, for example, with considerably less power and a four-cylinder engine, costs ú21,050 while an Audi A4 1.8 SE is ú21,106. By contrast, a Mercedes C180 Elegance, costs ú23,440.