One of the many changes made to the Lexus GS as it entered its fourth generation this summer was the introduction of a new naming system. Since the heading of this review has already told you that the model being tested here is called Luxury, you might be drawn to the suspicion that it represents the summit of the range, and is festooned with every sort of wonder that Lexus can throw at it.By no means. "Luxury" is to the GS almost as "1.6L" was to the Vauxhall Cavalier. There is another, lower trim level called SE, but that applies only to the GS 250 and not to the petrol-electric GS 450h tested here. In GS 450h terms, the only way from Luxury is up, to the £6000 costlier F Sport and Premier.Apart from a mildly reduced specification (details of that later), choosing Luxury denies you the opportunity to experience the rear-wheel steering and variable suspension available further up the range, and limits your choice of driving modes to three, namely Normal, Eco and Sport, rather than the four, including Sport Plus, found in the more expensive models.I don't think any of this matters much. The test car came to me in Eco mode. I tried Normal and Sport briefly, decided they didn't add much to the experience, switched back to Eco, stayed with it from then on. I didn't miss Sport Plus at all.As for the rear-wheel steer and the variable suspension, I'm sure they're lovely, but even without them the GS 450h is a really, seriously, properly good car to drive. It's not very sporty (no Lexus south of the LFA supercar could be called that, despite the company's efforts to persuade us otherwise) and it's easy to overpower the back end and bring the traction control into play on a wet corner, but you can still make rapid progress if you need to.As the luxury car it claims to be, it is absolutely wonderful, at least in a driving sense. The ride is beautiful, the handling spot-on as long as you don't force the issue. The steering is firm, but so incredibly smooth that it seems impossible there should be such lowly things as metal, grease and rubber between you and the road.The throttle action is equally fine, and so, up to a point, are the brakes, though there's so much reaction in the first inch or so of pedal travel that you have to be careful not to send the car into a nosedive when all you were aiming for was a delicate removal of excess speed.Speed. Yes. About that. I've already suggested that this is not a car to be hustled round corners, but in a straight line you can really let rip (if circumstances allow, of course). The 3.5-litre V6 petrol engine and the electric motor, driving through a CVT automatic gearbox with six ratio holds, combine to produce a maximum of 341bhp, and that's enough to fire this large machine from 0-62mph in 5.9 seconds. If you try this after a few miles of wafting gently through the countryside, it comes as quite a shock.In gentle running (such as maintaining 40mph on level ground, and certainly in most low-speed urban situations) the engine switches off and lets the motor do the work, which of course saves fuel and - perhaps equally important in such a car - adds to the feeling of luxury. Why, after all, should there be engine noise when there doesn't need to be? The V6 isn't the quietest Lexus has ever devised, and it always makes it presence felt when it restarts, but noise levels are generally very low.The only snag about electric-only motoring is that, when you're not going quickly enough to generate any tyre roar, pedestrians don't know you're coming, and you have to keep a close eye on them. That aside, the GS is every bit as relaxing to drive in town as it is on the open road, and it has the unexpected advantage of an extraordinarily tight turning circle for something so large.On the official EU test, the GS 450h achieves 46.3mpg. It didn't do that in my hands, but I was very pleased to have averaged around 40mpg in several hundred miles of very varied, and occasionally foot-to-the-floor, motoring. This is possible only because of the electric motor and its battery pack, which takes up a fair chunk of the possible luggage space.At 465 litres, this is 65 litres short of what the (cheaper but much slower and less economical) GS 250 offers, but it's still a useful amount, and way ahead of the previous 450h's disappointing 280 litres.Also on the subject of room, there's not as much of this in the rear as the length of the car suggests there should be, and although hardly anyone will feel cramped in the front the driver's seat can't be set as upright as I'd like it to be.Other than the technical aspects mentioned earlier, the Luxury differs from the F Sport and Premier in that it doesn't have an auto-dimming interior mirror or adapative headlights, there's less adjustment for the front seats, satellite navigation is not standard and the 17-speaker Mark Levinson sound system offered on the more expensive models isn't available even as an option on this one.For all that, the Luxury is well enough equipped for the likes of me, with a beautifully put-together if not particularly adventurous interior. But it's the way it drives, and the amount of fuel it doesn't use, that makes this one of my favourite Lexuses ever, and certainly one of the cars I've most enjoyed in 2012. Engine 3456cc, 6 cylinders plus electric motor Power 341bhp Transmission CVT automatic Fuel/CO2 46.3mpg / 141g/km Acceleration 0-62mph: 5.9 seconds Top speed 155mph Price £44,995 Details correct at publication date