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I remember seeing the Japanese commercial using IS as intelligent sport and maybe that's what it stands for in Japan. But I spoke with a Lexus Technician Representitive at a Taste of Lexus event a while ago and he told me that IS stood for Individual Sedan, which makes sense because it would be based towards the younger/"non-fitting of any catergory" crowd. That's what it should stand for in the U.S. at least.
The same rep. also told me that ES stood for Executive Sedan.