In 1982, the new Group C regulations were introduced to the World Championship. This rule set required teams to use coupé-style cars that had to be able to meet a fuel economy standard mandated at 100 kilometres (62.1 mi) for every 60 litres (16 US gal) of fuel.[2] The Lancia LC1, which had been built to the older Group 6 regulations, initially competed in 1982, but had to be replaced in order for Lancia to earn constructors' points in the World Championship, now open to Group C cars only in 1983.[3] Besides the fact that the LC1 had an open-cockpit, the turbocharged straight-4 Lancia engine it had used was not capable of achieving the fuel economy necessary in the new Group C regulations, requiring Lancia to also seek a new powerplant.[4] Under the direction of Cesare Fiorio, Lancia began to work on the LC1's replacement.


The large radiator opening in the front of an LC2. The additional brake cooling ducts are beneath the headlights.
Lancia lacked a production engine large enough to base a racing engine on, leaving the company to turn to outside sources. Since Lancia were owned by the Fiat Group, they were able to seek the assistance of fellow Fiat company Ferrari. Ferrari allowed Lancia to adapt the new naturally-aspirated 3.0 litres (183 cu in) four valve V8 which had been introduced in the Ferrari 308 GTBi QV in 1982.[1] The engine was reduced in capacity to 2.6 litres (159 cu in)[1] and two KKK turbochargers were added to help the engine provide the fuel economy and power necessary.[2] The specific engine displacement was chosen because of the possibility of using the same engine in the North American CART series.[4] The engine was initially connected to a Hewland five-speed manual gearbox, which was replaced by an Abarth-cased unit in 1984.[5][6]
Design work on the chassis was split between Italian specialist racing car manufacturers Abarth and Dallara,[1] the latter of which built the aluminium monocoque and the kevlar and carbon fibre bodywork in their factory. The LC2 featured a large intake for the radiators in the center of the nose of the car just as the LC1 had,[7] unlike the contemporary Porsche 956s which drew all their air from behind and to the sides of the cockpit. This air was also directed through the side bodywork to feed the intercoolers for the turbochargers.[7] Inlets for the rear brake cooling ducts were also integrated onto the side bodywork of the car, immediately behind the doors. At the rear, a pontoon-style design was adapted to the fenders with the large wing bridging across the pontoons. The rear diffusers exited between the pontoons and underneath the wing.[4][6]
The LC2s were modified over their lifetime, with a multitude of modifications being made each season to the cars' aerodynamics, including adapting brake duct inlets beneath the headlights. The Ferrari V8 was modified in 1984, bringing the displacement back up to 3.0-litres in an attempt to increase reliability and horsepower while improved engine electronics from Magneti Marelli allowed the larger engine to use the same amount of fuel as the previous version.[1] In total, seven LC2s were built under the direction of Lancia, while a further two were built for Gianni Mussato without official backing after the program had ended.[8]