Engine Immobilizer System
WARNING: This page is about a different car, the 2002 Lexus ES 300. However, it is still accessible from the selected car via links, so may be relevant.
The engine immobilizer system is a theft prevention system. When you insert the key in the ignition switch, the transponder chip in the key's head transmits an electronic code to the vehicle. The engine will start, only when the electronic code in the chip corresponds to the registered ID code for the vehicle.
The system is automatically set when the key is removed from the ignition switch. At this time, the security indicator light flashes. When you insert the key in the ignition switch, the security indicator light goes out and the system is canceled automatically, which enables the engine to start.