Well the Lexus LS 400 isn't exactly a car you'd associate with beer - Dom Perignon is more like it - but that's what we thought about the original LS 400. For the money, luxury cars don't get much better. And it was also hard to see how the Lexus, from Toyota's luxury-car division, could get much better.

But the Lexus design team found all sorts of ways to improve on the original.

This is no mere face-lift. Toyota claims that 90 percent of the 1995 LS 400's parts and components are either all-new or completely redesigned.

And even though the original LS 400 was world-class in just about every respect - smooth power, quiet operation, meticulous fit-and-finish, velvet ride, top customer satisfaction - the new one is, yes, better.

Nevertheless, the skin is virtually all new, and the shape is far more aerodynamically efficient. Aerodynamic efficiency generally equates with a quiet interior and good fuel economy, and the new LS 400 is improved on both counts.

Although the library hush of the original LS 400 seemed almost beyond improvement, the new one is even quieter. Similes fail here. Cathedral quiet? Silent as sleep?

Perhaps an operational example is better. At 120 mph, we were able to converse in normal living-room tones with a Lexus engineer. And all the better to appreciate the subtleties of the excellent sound system.

Before you pick up your pen to tell us that this kind of driving belongs on a racetrack, that's exactly where it took place. Toyota gave us a preview of the new LS 400 late last summer, which included a day of driving in Quebec, and a day at the Ste. Jovite road racing circuit. More on that later. Meanwhile, our report focuses on the standard LS 400.

Lexus has also come up with something new in the seating department. Instead of your ordinary wire springs, the new seats have a system of coil springs, little torsion bars and stabilizer bars, not unlike the car's suspension system.

The idea is to improve comfort and help the seat cushion resist deformation during hard cornering, and Toyota has patented the system. This may seem like a complicated way of achieving the goal, but it works, it doesn't add weight and it's typical of the kind of inventive engineering that's gone into this car.

Here's another example: The dual automatic climate-control system is 25 percent more compact than before, but also has increased capacity.

And another: The optional 6-disc CD changer is mounted in the dashboard - a first - above the glove box, which is bigger than the old glove box, and there's still room for the passenger-side airbag.

Other interior elements that we loved in the original are unchanged: the spiffy wood trim and the outstanding backlit primary instruments, which we think are the most attractive in the industry.

The LS 400 isn't a Volvo, but its safety credentials measure up as contemporary: dual airbags, a side-impact system that meets 1997 federal standards, enlarged front and rear crumple zones to absorb impact energy, front seat-belt pretensioners, 3-point seat belts at all five seating positions and a new collapsible steering column that has earned Toyota yet another patent.

Something that has not changed is the LS 400's extensive inventory of luxury features. Take a look at the specs. It's clear that there's nothing basic about the basic LS 400.

We do have one quibble with the interior: Trunk space has been whittled down to 13.9 cu. ft., which is not much more than what's offered in the Ford Contour.

First, the new LS 400's performance is distinctly stronger than the original. Engineers have mined 10 more hp and 10 more lb.-ft. of torque from the silky 4.0-liter aluminum V8 engine, simultaneously reducing the engine's mass.

In fact, although the wheelbase is longer and the chassis has been stiffened, the entire vehicle is 209 lb. lighter than its predecessor.

This adds up to impressive acceleration. Lexus engineers claim a 0-to-60 mph time of about 7 seconds, which may be a trifle optimistic. On the other hand, even if the acceleration isn't quite that vigorous, it's clearly quicker than the previous car, which wasn't exactly sluggish.

And it's also more fuel efficient, by one mpg in the city and two on the highway, which means it continues to escape the gas-guzzler category.

A longer wheelbase and suspension refinements add up to better ride and handling, although here the distinctions are more subtle. The responses of the new LS 400 in racetrack handling maneuvers are a little more decisive, and its steering feel is a little more positive. The optional air suspension is also more responsive, thanks to extensive software improvements in the computer that governs the system.

We'd give the edge to the standard suspension for absolute handling, but the air-spring setup provides the better ride - better, in fact, than just about any car in this class.

All things considered, the LS 400 still isn't a sport sedan in the BMW sense. But that wasn't the objective. The objective was excellent handling combined with comfort, and that's exactly what the new LS 400 delivers.

It also delivers exceptional braking performance. Anti-lock is standard, of course. That's true of virtually all luxury cars today. But Toyota also improved the power and efficiency of the system. Better brakes in a lighter car yield better stopping, and considering the excellence of the original system, that's impressive.

But as the car quickly established itself as something special, the prices soared just as quickly. By 1994, the base price was just over $51,000 - still a terrific car, but no longer a bargain.

When we drove the new model last summer, there was informal talk about a base price of $60,000. As you'd expect, this didn't meet with much enthusiasm. And for the time being, at least, Toyota has decided to hold the line on the LS 400's base price to the $51,000 area.

That's still not a bargain, but the car is competitively priced versus its chosen targets, which include the bigger BMW and Mercedes sedans, as well as the Infiniti Q45. (Lexus doesn't regard the Cadillac Seville, new Lincoln Continental or relatively inexpensive Oldsmobile Aurora as key competitors. We don't agree with this position; we suspect you don't either.)

Nevertheless, there's no denying the elegant refinement and inventive engineering of this new car.

But the world's luxury carmakers shouldn't worry too much about the superb new LS 400. Instead, they should worry about what Lexus is going to do next.