The 968 actually started development as a 944 "S3", set to replace the "S2" variant that Porsche had introduced in 1989. However, so many of the 944's components were modified or replaced entirely during development stages that Porsche chose to introduce the variant as a new model, hence the 968 nameplate. Production was moved from the VW-Audi plant in Neckarsulm (where the 924 and 944 had been manufactured under contract to Porsche), to Porsche's own factory in Zuffenhausen.
The new model was powered by an updated version of the 944's straight-4 engine, now displacing 3.0 L and producing 240 PS (236 hp/177 kW). Changes to the 968's power train also included the VarioCam variable valve timing system, newly-optimized induction and exhaust systems, a dual-mass flywheel, and updated engine management electronics. The 968's engine was the second-largest 4-cylinder ever offered in a production car, and the most powerful naturally-aspirated 4-cylinder engine ever sold in a production automobile up to that time. A new 6-speed manual transmission was offered, as well as a dual-mode Tiptronic automatic.
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