WASHINGTON, D.C.–Like the Pope handing out blessings, General Motors vice-chair Bob Lutz gave hope to fans of the auto maker's sad-sack Saab division.

"We in senior management are convinced that Saab is a jewel in the GM crown, and we're determined to ensure its success," Lutz recently wrote on the company's FastLane blog.

And who's to argue with Pope Lutz?

Like the Catholic Church, GM is too big of a behemoth to give credit to one person.

But since Lutz's arrival in 2002, each new GM product – including the new $45,000 9-3 Sport Sedan Aero XWD – is measurably more competitive.

Not only in terms of quality and performance, but more significantly, the General's vehicles are becoming more relevant and desirable to customers who would potentially buy imports instead.

In its 43 years before being taken over by GM in 1990, Saab's fiercely independent thinking resulted in inimitable technical solutions.

To name only a few industry firsts: diagonally split dual brake circuits, anti-knock sensor and direct ignition.

While the average piece of Detroit iron had four doors, a trunk, and was driven through its rear wheels by some large displacement iron lump, Saab went against the grain and offered light and nimble hatchbacks, front-wheel drive and turbocharged four-bangers.

Today, after nearly two decades of mediocrity under GM's financial stewardship, Saabs are barely distinguishable from mainstream cars.

As a premium brand, Saab has become dangerously irrelevant. And GM knows it.

"We sell a lot of trucks in the middle of the (U.S.)," explained the new honcho of Saab Automobile USA, Steve Shannon, at the recent 9-3 preview event.

"But we need to sell more cars, too. And with Saab, we think we've underutilized its potential."

No kidding.

In Canada, rival Volvo sold almost 10,000 vehicles last year. Saab? Around 2,700.

A big part of Volvo's success has been the availability of all-wheel drive since 1996. Hence, the big news at the new 2008 9-3's introduction was the presentation of Saab's first AWD system.

Badged XWD, Saab marketing types want you to pronounce it as "Cross Wheel Drive" (must be a Swedish thing).

Developed in-house, the exclusive XWD is a fourth-generation of the Haldex electronically controlled, on-demand system, according to Saab.

Like other on-demand systems, more than 90 per cent of the engine's power pumps through the front wheels of an XWD-equipped Saab when motoring at a steady cruising speed.

Hit the accelerator and XWD sends torque rearward to aid traction and weight balance – nothing breakthrough there.

Where Saab's take on AWD differs is its philosophy of including the driver as part of the process.

Saab's XWD has its own computer that talks not only to the AWD system, but also to the stability control and the engine.

Important for drivers who like to be in control of their car, XWD raises the threshold at which the stability system will intervene.

For example, when cornering, the XWD computer gains input from the stability control sensors to balance the car's handling by varying power delivery to the rear wheels instead of clamping on the brakes.

A further Saab exclusive is an optional electronic rear limited-slip differential ("eLSD"), which can send up to 40 per cent of engine torque between the rear wheels.

Using both yaw sensors and rear wheel speed, eLSD can help traction on slippery roads yet also aid in holding your line through a corner, according to Saab.

At the press event, Saab let us drive the only XWD-equipped 9-3 currently in North America.

Our seat time was limited to a few laps on a low-speed slalom course and grassy airport infield. But Saab's claims that this is an AWD system for those who like to drive became apparent immediately.

Slicing the 9-3 Sport Sedan Aero XWD with the six-speed stick through the cones at about 65 km/h delivered both little drama and minimal understeer.

We then had a chance to try XWD on a grassy loop that encouraged oversteer (that's doughnuts to my friends back in Ottawa).

Compared to a FWD 9-3 that would have understeered (or plowed) straight ahead, the XWD 9-3 allowed me to easily engage in controlled, four-wheel drifts without the e-nannies cutting in and spoiling the fun.

A 9-3 Sport Sedan Aero XWD in the snow and slush with a good set of snow tires would be a hoot.

Except for a revised rear-wheel geometry to accommodate the XWD's rear subframe, and new styling inspired by the Aero X show car, Saab hasn't made any noteworthy suspension changes for the '08 9-3. Which is fine by me.

The existing car's supportive front seats, light but accurate steering, torqued-up turbocharged engines, and quiet and composed ride over bombed-out pavement have always been standout 9-3 qualities.

For '08, the base model front-wheel-drive 9-3 Sport Sedan 2.0T, with its 210 hp turbo inline-four and six-speed manual, starts at $37,350.

The Aero version continues with its 2.8 turbo V6 at $45,390, though there's a slight bump in horsepower this year from 250 to 255. Get the SportCombi – wagon versions of the 9-3 – and add $1,600.

Available in early '08 exclusively on the Aero versions of the sedans and wagons, XWD will be a $2,200 stand-alone option. It also brings a 25 hp boost on the Aero's 2.8T V6.

Saab plans to make XWD available on the base 2.0 T models in '09.

- John LeBlanc, Publisher.

2008 Saab 9-3 Sport Sedan Aero XWD
PRICE: $47,590
ENGINE: 2.8 L V6
POWER/TORQUE: 280 hp/295 lb.-ft.
COMPETITION: Audi A4, BMW 3 Series, Volvo S60/V50, Subaru Legacy GT
WHAT'S BEST: AWD (finally!), delicate steering, supportive seats, ride/handling balance
WHAT'S WORST: Interior materials don't match up well to premium competitors
WHAT'S INTERESTING: This is Saab's first AWD system in the firm's 60 years of making cars.