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 exterior dimensions and engine displacement, and adapted parts from the larger second-generation Aristo/GS. The 2.0-liter 1G-FE inline-six powered AS200 (GXE10, sedan) featured a five-speed manual transmission as standard, while a four-speed automatic was optional. The 2.0-liter 3S-GE inline-four-powered RS200 (SXE10, sedan) featured a six-speed manual transmission, while a five-speed automatic was optional.