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The newest little Lexus, the IS 300, is a direct challenger to competitors such as the BMW 3-series and Audi A4. That’s a niche not normally inhabited by Lexus, which makes the IS 300 important as Lexus reaches for younger buyers.

Derived from the Japanese Toyota Altezza (Lexus is the American luxury division of Toyota), the IS 300 slots into the bottom of the Lexus line next to the more sublime ES 300. The front-wheel-drive ES 300 is calm, quiet and smooth, like a Camry dressed in evening clothes. The rear-wheel-drive IS 300, on the other hand, has a firm ride, quick handling and styling that is dramatically more youthful, especially when painted electric yellow like the test car.

To make the transition from Altezza to IS 300, Lexus swapped the four-cylinder powertrain for the same inline 3.0-liter six-cylinder that is used in the GS 300. This 24-valve, DOHC engine produces 215 horsepower, and it is a model of smoothness and refinement. Variable valve timing enables the power to ooze from it in a stream that is as smooth and creamy as a Starbuck’s Frappuccino. Lexus says it scampers to 60 mph in 7.1 seconds, and that seems about right judging from my time behind the wheel.

Currently there is no manual transmission offered, which is crucial for a car that competes with BMW, which is renowned for its slick-shifting gearboxes. Lexus says a manual is being certified and should be available on the 2002 model.

The automatic is not totally without sporting intentions, however, because it can be shifted manually by buttons on the steering wheel. Those beset by Walter Mitty dreams of being a Formula One race driver will enjoy flicking up and down through the gears with their fingers, but frankly, after a few miles, I found it was much more enjoyable to let the transmission shift for itself. (That’s mainly because it does such a good job.)

The IS 300’s body style is fairly plain. It relies on simple details such as clear taillight lenses, a fat exhaust pipe and a power bulge in the hood to give it a sporty air. Equipped with 17-inch wheels and low-profile tires, it sits low on its haunches and that adds to its street fighter attitude.

The 17-inch wheels play a key role in the car’s drivability. Go-cart handling is pretty much a given for a car in the segment, and the IS 300 comes closer to that than any other Lexus. It feels a lot like a tightened-up, scaled-down GS 300, but when pushed hard it is even more direct. The fully independent suspension is taut, probably more so than the BMW, but I didn’t ever find the ride quality objectionable.

The steering has excellent feel but doesn’t turn into corners quite as telepathically as the BMW.

Anti-lock, four-wheel disc brakes and traction control are standard equipment.

Settle behind the three-spoke steering wheel and the first thing you see is an instrument package that looks like a chronograph. Three small dials are inset into the speedometer’s face, and while they look slick, they detract from reading the speedometer quickly.

The rest of the interior is also youthful and sporty. The console has plastic accents that have a vaguely metallic texture, and the gearshift knob protrudes from a chrome-ringed panel that looks European.

Seats are nicely contoured for support, and the optional combination of leather and Ecsaine (looks and feels like suede) does a great job of holding you gently in place during vigorous driving.

The gearshift lever is topped by a large chrome knob that is an ideal interface between the driver and the transmission. Unfortunately, it gets almost too hot to touch when it sits in the summer sun.

Typical of Lexus, secondary controls and switches are as smooth as if they were mounted in silicon. Knobs are elegantly simple. The only discordant touch was the buttons for the seat heaters.

Even though the IS 300 sits atop a 105.1-inch wheelbase, rear-seat legroom is tighter tha either the BMW 3-series or the Audi A4.

The IS 300 proves Lexus can build an entry-level luxury car with spunky handling and youthful exuberance. It is the perfect counterpoint to the more sedate ES 300.

Price

The base price of the test car was $30,500. Options included the leather/Ecsaine power seats, power sunroof, limited-slip differential, heated front seats, trunk mat and wheel locks.

The sticker price was $34,635.

Warranty

Four years or 50,000 miles.

Point: Creamy power, excellent handling and subtle bodywork make the IS 300 a stealthy sports sedan that can tackle twisty back roads with confidence. On top of that, it has typical Lexus quietness.

Counterpoint: Back-seat legroom is tight, the chrome gearshift knob heats up in hot weather and the multidial speedometer face is not easy to read.

SPECIFICATIONS:

Engine: 3.0-liter, 6-cyl.

Transmission: automatic

Rear-wheel drive

Wheelbase: 105.1 inches

Curb weight: 3,270 lbs.

Base price: $30,500

As driven: $34,635

Mpg rating: 18 city, 23 hwy.