Lexus had already taken a shot at the 3-Series with a brash 2001 model year sedan called the IS 300. That car had been sold in Japan as a Toyota for a few years — with a smaller engine.

The IS 300 had been the most fun-to-drive Lexus built up to that point and brought some experience in the entry luxury sports sedan market to Toyota. But most importantly for Lexus, it got the attention of a younger audience — the median age of an IS 300 buyer was 29.

To illustrate how ambitious Lexus’ goal actually is, in 2004, BMW sold 106,549 3-Series’ making it BMW’s top-selling vehicle in this country. Meanwhile, Lexus sold a mere 9,972 IS 300s.

Lexus is banking on the restyled IS — both the IS 250 and the high-performance IS 350, — both of which are more refined and generously equipped than its predecessor — to retain and expand that younger demographic while grabbing older buyers, and boost annual American sales to 40,000 units.

Walkaround: While the 2006 IS resembles the BMW 3-Series sedan, which was also revamped for 2006, the new IS boasts a sleeker and more muscular and high-waisted profile than its predecessor — a look partly derived from the redesigned midsize GS sedan.

The wheelbase is a fairly long 107.5 inches, up 2.4 inches from the IS 300. Overall the car is 3.5 inches longer, 3 inches wider, and nearly an inch taller.

There’s an optional performance package with 18-inch (vs. standard 17-inch) wheels and lowered sport suspension, that isn’t really needed unless you’re a serious driving aficionado.

Interior: There’s lots of room up front in the comfortable, quiet, upscale, interior, which, as you would expect from Lexus, utilizes only high-quality materials. The bucket seats are very supportive and then there’s that very cool and easily read Optitron instrumentation with needles that appear to float.

Starting the engine is keyless — you just push a dashboard button to start or stop the engine.

There’s a long list of standard comfort and convenience features, including a 13-speaker audio system, and safety systems that include a wide array of airbags.

Options include leather upholstery and heated-ventilated front seats, wood interior trim, a sunroof, and easily operated navigation system with a rear TV camera, a more upscale audio system, steering-linked headlights, and a collision avoidance system with radar cruise control.

The trunk is roomy enough, but the car’s racy styling forces the opening to be rather small.

Under The Hood: The IS 350 is a hot rod — pure and simple. Its 3.5-liter 306-horse V6, coupled to a new 6-speed automatic that allows manual gear selection with a floor shifter or steering wheel paddles, outpowers all others in its class, doing the 0-60 drill in 5.6 seconds.

The automatic transmission shifts crisply in the drive mode. Using the paddle shifters works well as long as you’re going in a straight line, but somewhat perplexing when turning the wheel.

Extremely good aerodynamics and the efficient transmission helps the IS 350 deliver decent fuel economy — 21/city and28/highway — for a high-performance sports sedan that weighs 3,435 pounds (3,651 with the all-wheel drive option). However, it requires premium fuel.

Behind The Wheel: The IS 350 is a serious hot rod. In fact, I got a ticket for doing 97 on I-90 during a trip to Spokane (got it dismissed though) without even realizing I was doing anywhere near that speed. This car handles so well and is so smooth it’s easy to lose track of speed.

I found the electric power steering quick but slightly heavy for my personal taste. New front and rear suspension coupled with powerful new anti-lock brakes deliver crisp handling and sure stops.

While the IS 250 has traction control and a Vehicle Stability Control system, the IS 350 is equipped with a more sophisticated Vehicle Dynamics Integrated Management system that keeps the car controlled under trying conditions.

Whines: The suspension eliminates most road imperfections, but is so firm it can occasionally cause a slightly hard freeway ride under some conditions. The brake pedal action is grabbier than I like. The larger dimensions of the new IS belie its rear-seat space, which is cramped and quite tight, especially for long-legged adults. Narrow door openings don’t help either.

Bottom Line: Lexus has proved that it knows a thing or two about building highly competitive automobiles. With the new IS 350 priced at $35,440, this new Lexus is every bit as smooth and solid as the BMW 3-Series, and a huge improvement over the edgy IS 300. With available all-wheel drive, it’s a true high-performance sports sedan that’s more of a true driver’s car than anything previously built by Toyota. If Lexus convinces buyers it can do performance as well as it does luxury, BMW could have a serious problem on its hands.