The first generation 9-3, a substantially improved last-generation Saab 900 was launched in 1998 for the 1999 model year. It featured slightly sleeker styling with some models sporting a black rear spoiler and removed Saab's trademark centrally-mounted "snow flap". It was available as a three or five-door hatchback, and as a two-door convertible. It was the last small Saab to use the company's H engine. Notable improvements over the Saab 900 were improved ride and handling and substantially improved crashworthiness with standard side impact airbags with head protection and active headrests. The Saab 9-3 along with the Saab 9-5 and the Volvo S70 were the first cars in the world to earn the maximum score in a side impact augmented by a pole test based on Euro NCAP testing.
It was also available with a new variant of the B204 engine (B204E), a low pressure turbo (LPT) engine based on the B204L used in the last generation Saab 900. The first generation 9-3 was also the first Saab available with a diesel engine, an Opel sourced engine shared with the Opel Vectra
A Saab innovation is the 'Night Panel', carried over from the Saab 900, which permits dousing of the instrument panel lighting, except for essential information, for less distraction when night driving.
A total of 326,370 first generation 9-3s were built.
A high-powered version of the 9-3 was the Viggen (from the Swedish åskvigg, meaning "thunderbolt"), named after the Saab 37 Viggen aircraft. It is no longer in production. It came with a turbocharged 2.3L engine, giving 225PS (165kW) (later 230PS (170kW)). Acceleration from 0-100km/h could be reached in 6.4 seconds and the top speed is 250km/h (155 mph). To handle the high power and performance the following elements were changed/modified: heavy duty clutch and pressure plate, stiffened and lowered springs, firmer dampers, stronger CV joints and driveshafts. In addition to extra power and torque, it also featured a special rear wing (increasing the downforce by 50%) requiring relocation of the radio antenna, aerodynamically designed bumpers and side skirts (reducing the drag coefficient by 8%), specially bolstered and colored leather seats (available in four colors: black with black inserts, black with blue (lightning blue) inserts, and black with orange (red ochre) inserts), sportier suspension, bigger wheels, upgraded brakes, and other upgraded parts. Production quantity and color choice was very limited (Fewer than 3000 Viggens manufactured; available colors are lightning blue, monte carlo yellow, steel gray, silver, black, or laser red). The Viggen was only available with a five speed manual transmission, CD player, and the Viggen specific motorized and heated leather seats. In 1999, the Viggen was the first 9-3 with the Saab's own Trionic 7 engine management system, which makes 2,000,000 calculations every second from combustions temp, boost control, variable torque curves and many other critical engine processes.