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The first LT petrol engine was a modified Audi 100 2.0 L inline four-cylinder. In 1976 Volkswagen wanted to make a sports coupe and hadPorsche design one for them using parts from the VW/Audi group bin with front engine and rear wheel drive. They didn't go with the design as the rest of the range was switching to front wheel drive i.e. Golf/Polo/Jetta so VW came up with another design (the Scirocco).

Porsche then decided to built it anyway in a collaboration with VW culminating in the Porsche 924 running with an Audi 2Ltr engine withBosch K-Jetronic injection which is the same basic engine that was in the 2Ltr petrol LT at the time albeit with a carburettor instead. It was rated at 55 kilowatts (75 PS; 74 bhp) and achieved higher torque at lower engine RPMs.

An inline four-cylinder diesel engine by Perkins was available. The 48 kilowatts (65 PS; 64 bhp) 2.7-litre diesel was included in the LT range from 1976 onwards.

The Perkins engine was replaced in 1978 with a six-cylinder variant of the Volkswagen Golf diesel. The original 1.6 L four-cylinder engine became the D24 2.4 L six-cylinder, delivering 55 kW (75 PS; 74 bhp). This engine was also used in a number of Volvo passenger cars.

In December 1982, an upgrade to the LT was introduced. The six-cylinder diesel was available as a turbodiesel, the Volkswagen D24T engine, producing 75 kilowatts (102 PS; 101 bhp) and 195 newton metres (144 lbf·ft) of torque. In addition, the six-cylinder engine was now also available as a 66 kilowatts (90 PS; 89 bhp) petrol engine. All engines were now mounted with a clear offset alignment that allowed for a flatter engine compartment, which was shifted further to the rear for more space for a third seat in the cab.

In 1992, an overhauled turbo-diesel engine with charge air cooler and 70 kilowatts (95 PS; 94 bhp) was introduced - the Volkswagen D24TIC engine.