Introduced in 1998 with the AS200 (Chassis code GXE10) and RS200 (chassis code SXE10) sedans, the compact vehicle was produced using a shortened, front-engine, rear-wheel-drive midsize platform, allowing Japanese buyers to take advantage of tax savings imposed by Japanese government regulations concerning vehicle engine displacement (but not exterior dimensions, as the car was 20 mm wider than the 1,700 mm standard), and adapted parts from the larger second-generation Aristo/GS.[9] The 2.0-litre 1G-FE straight-six powered AS200 (GXE10, sedan) was equipped with a six-speed manual transmission as standard, while a four-speed automatic was optional. The 2.0-litre 3S-GE straight-four-powered RS200 (SXE10, sedan) was equipped a six-speed manual transmission, while a five-speed automatic was optional. The different size engine choices gave Japanese buyers a choice of which annual road tax obligation they wanted to pay, and the larger engine offered more standard equipment as compensation.

1999–2005 Lexus IS 200 sedan (GXE10)
The design received critical acclaim at its 1998 launch and was awarded Japan's "Car of the Year" honor for 1998–1999. A few months later, Lexus began marketing the IS 200 equivalent models in Europe.[10] The IS 200 in Europe was rated at 153 hp (114 kW), with a top speed of 216…