Lexus IS 220d

Price: £22,200
Engine: 2,231cc, four cylinders, 16 valves, turbodiesel, 175bhp at 3,600rpm, 295lb ft at 2,000-2,600rpm
Transmission: six-speed gearbox, rear-wheel drive
Performance: 134mph, 0 to 60mph in 8.7 seconds, 44.8mpg official average
CO2: 168g/km

What exactly is L-finesse? Lexus defines it as "dynamism based on the visual contrast between simplicity and elegance" and "powerful, sweeping lines with contrasting convex and concave surfaces". The new Lexus IS range does have an elegant simplicity, certainly.

Parent company Toyota takes Lexus seriously, part ly because, as of August, the brand has existed in Japan too, giving it a separate identity. Previously, the home market viewed Lexi as upmarket Toyotas: the previous IS range was an Altezza, for example. The cars had a split personality, but now they can be themselves.

The first Lexus to show the new thinking was the current GS. Now it's joined by the new IS, a smaller car the look of which is a continuation of the GS: vertically-slatted grille set low between angled headlights, a minimal front overhang with wheels pushed forward, a rising waistline, a "fast" tail and minimal adornment. It's intended to be the breakthrough car for Lexus, competing head-on withthe likes of the BMW 3 Series and the Mercedes-Benz C-Class.

Crisp-edged luxury with a sporting taste is a nice idea, but there is a snag. All past Lexi had at least six cylinders, but the diesels are four-cylinder units. This is a prestige liability for a Lexus, so the engine had better be good.

It is. The 2.2-litre, 175bhp Toyota Avensis engine has been adapted for a rear-wheel-drive application, which involved a new gearbox, changes to the steering system's positioning and new internal body pressings for the diesel catalyst.

The other engine is a 2.5-litre V6 with direct injection and variable valve timing. It can create up to 204bhp via a six-speed manual or a five-speed automatic gearbox. The diesel is six-speed manual only.

We'll try the IS 220d first. I'm in the luxury SE version, or rather, SE-L, which is extra-plush. It has soft leather and, on the flat area around the gear lever, a shiny, beautifully made slice of wood made by Yamaha.

Soft, padded surfaces are almost everywhere else, the exceptions being the hard plastic, leather-grained covers for the centre pillars and the metallised, grey-brown plastic of the centre console. The console is scatter-gun in its button positioning, but it can host a fabulous surround-sound Mark Levinson stereo and DVD system. The dials are those Lexus/Toyota "Optitron" items with glowing needles, and when you near the rev-limit the inner circle of the rev-counter glows orangey-red. The Lexus logos on the door-sill scuffplates glow in bluewhen you open a door; open a rear door, though, and you'll be disappointed at the leg-and-foot room.

The diesel engine is smooth and quiet and it pulls with gusto from low speeds. The six-speed gearbox doesn't have the lightest of shifts, but its ratios allow quiet cruising - a perfect car for stress-free long distances with low fuel bills.

There's a Sport version of the IS 250, which I drove with the optional automatic transmission. This doesn't have the altered rear-axle ratio, but does have the gripper mock-suede seats, the lack of wood (instead it has metallised plastic, unfortunately different from the centre console's), plus firmer, lower-riding suspension. The V6 engine is smooth and sonorous, but the automatic transmission holds it back from giving its best. It's one of those irritating autos in which the "manual" mode isn't manual at all. If you select third, it treats that merely as an upper gear-limit instead of staying in that gear. Manual mode is too slow-acting to be satisfying, too, even with the up-down paddles on the steering wheel, so it's best left in automatic.

Both the IS 250 and the IS 220d are delightful in bends and over bumps, though. They feel bigger and less wieldy than their predecessor, but they flow well, and the Sport has keener, crisper responses to make up for its knobblier ride over poor surfaces. The way the stability system beeps when it's intercepting a slither is irritating, but the steering is accurate and its weighting feels right for the cornering loads acting on it.

The IS is a hefty car to have an electric power steering system. The IS uses a 42-volt system for the steering instead of the usual 12 volts. Forty-two volts lets engineers use lighter, slimmer wires, lower currents and more efficient energy transfer. A switching transformer in the steering ECU supplies the higher voltage.

The Lexus IS is elegant, it's luxurious, it clarifies the Lexus personality, but the aura is more careful Mercedes than sporty BMW. And I'm not sure that's what Lexus intended.

The rivals

AUDI A4 2.0 TDi, £21,690

A recent facelift has sharpened the looks and the driving experience, and the A4 is a handsome, beautifully wrought car. However, the 140bhp turbodiesel engine is not the sweetest.

BMW 320d, £23,225

This is the most fun to drive of all the premium four-cylinder diesels, with strong pace from 163bhp and fabulous handling. Ride is firm for British roads, but styling is odd and it is expensive.

JAGUAR X-TYPE 2.2d SPORT, £22,995

The Ford-built engine is smooth and punchy, but its 155bhp is shaded by Lexus's output. Styling remains fussy but cabin is good to be in and it gives a pleasing drive.