By 1999, Lancia lost its racing aura and became an upscale Italian brand bought by those who lived the golden era of the 037 and Stratos models.
Lancia built the Lybra SW on the same platform as the Alfa Romeo 156, and with the added trunk space, it was suitable for families. It struggled to find a new way on the market, but a few uninspired decisions and some reliability issues brought the once famous brand on its knees. In seven years of production, it barely managed to sell 164660 units in both body versions: sedan and station wagon.

The roof extended over the trunk area called for an additional set of side windows. However, in its quest for cost-cutting solutions, Lancia used the same rear doors from the sedan version. While this solution was acceptable for mass-market vehicles, it was uncommon in the premium segment where Lancia tried to get. In addition, its corner-mounted taillights looked like two commas.

The interior was much more pleasant. A tall and slightly curved dashboard with wood trims enhanced the view of the car. A 5” infotainment display with an option for a navigation system and GSM connectivity added a touch of modernism on the center stack. It was available with cloth or leather upholstery. Its split-folding bench extended the trunk size from 420 liters (14.8 cu-ft) to 1,300 liters (45.9 cu-ft), smaller than on a Ford Mondeo and with a higher loading lip.

Under the hood, Lancia installed a choice of diesel and gasoline engines ranged between 103 hp and 154 hp. The standard transmission was a 5-speed manual, while a 4-speed automatic was available for selected versions.