Lexus is wielding a green weapon in its battle with its German competitors in the compact executive saloon sector.

Not content with aggressive styling, front engine/rear-drive design and a superbly upmarket interior, the Japanese carmaker aims to woo buyers with low CO2 emissions.

So the rival to the Audi A4, Mercedes-Benz C-Class and BMW 3 Series now goes into battle without a diesel engine in the range.

Instead, the third generation Lexus IS saloon is the first IS to receive Toyota's petrol-electric drivetrain. Rebadged as the Lexus hybrid drive, the system combines a 178 horsepower, 2.5-litre petrol engine with a 141 horsepower electric motor.

As with other Lexus and Toyota hybrids, the water-cooled electric motor is capable of driving the rear wheels independently for short periods, but usually works with the engine to provide drive.

Press the starter button and the car slips silently forward on battery power and remains whisper quiet even when the petrol engine cuts in.

Delivering real refinement, the IS combines luxury and economy with excellent handling. Compared to its predecessor, the steering delivers a crisper feel and improved feedback and poise.

Not that anyone on board is aware of the sophisticated technology as you breeze along in a luxurious leather cocoon, surrounded by soft-touch fascia and heavy, expensive looking switchgear reminiscent of its big brother, the lavish LS limousine.

The test car, in F Sport trim, introduces sports-themed elements to the interior with aluminium sports pedals, perforated leather trim on the multi-function steering wheel and gear lever, eight-way electrically-adjustable, heated front sports seats and aluminium trim.

Outside, the already sharply-styled saloon sits on larger 18-inch, 10-spoke alloy wheels and gets a redesigned front grille and bumper, along with sets of brighter LED headlights and front fog lamps.

Air conditioning is now controlled by the first electrostatic switches in a Lexus: sliding a fingertip up or down the bar-shaped switch will adjust the temperature in half-degree Centigrade or one-degree Fahrenheit increments.

The centrally mounted screen for the multimedia system has grown to 10.3 inches, with a split-screen function so that different information displays can be presented simultaneously.

Features such a blind spot monitor and rear cross traffic alert provide the driver with improved warnings of potentially unseen hazards.

The Lexus Premium Navigation is operated using the world’s first slide haptic joystick mechanism – a slide-type controller much like a computer mouse scrolling across the display screen.

Safety features abound on the car, including a radar and camera-operated system that can help the driver avoid a collision, or lessen the consequences of an impact, even at high speed. It can also detect pedestrians and activate automatic braking if someone is spotted in front of the car.

The radar and camera are also used to provide adaptive cruise control and allow you to set long, medium or short vehicle-to-vehicle distances.

Other safety systems use a camera mounted behind the rear-view mirror to track the car’s course between lane markings painted on the road surface. If it detects that the car is moving out of its lane without the turn indicators being used, it will light up a warning on the multi-information display and sound a buzzer.

The system also monitors driver distraction or drowsiness and will sound an alert and display a warning on the display, recommending you take a break.

The traffic sign recognition system on the IS recognises traffic signs and commands using the windscreen-mounted camera, and displays them in the dashboard.

With batteries for the electric motor stowed beneath the boot, the hybrid’s loadspace remains sizeable and is combined with the versatility of split/fold rear seats.

This is the most powerfully persuasive package so far assembled by Lexus to take a tilt at the classy Continental competition.

Auto facts

Model: Lexus IS 300h F Sport

Price: £36,235

Insurance group: 30E (1-50)

Fuel consumption (combined): 61.4mpg

Top speed: 125mph

Length: 468cm/184.2in

Width: 181cm/71.2in

Luggage capacity: 15.9 cu ft

Fuel tank capacity: 14.5 gallons/66 litres

CO2 emissions: 107g/km

Warranty: Three years/ 60,000 miles