The Porsche company returned to the 24 hour endurance race at Le Mans in 1996. The 917 and 935 had been dominant competitors in the 1970s, and the 956/962 family had done the same in the 1980s. But when profits declined and racing organizers changed rules to encourage new competitors and keep racing interesting, Porsche dropped out in the early 1990s.
Their street cars (356, 550, 911, 914, 930) had been competing since the 1950s, winning the “Index of Thermal Efficiency” and small displacement classes, 1200cc, 15000cc, 2.0 litre. They also built factory racing cars to sell to customers (RSR, Carrera GTS (aka 904), Carrera 6 (aka 906), 907, 908, Carrera 10. The Carrera 6 was probably the last car a customer could take delivery at the factory, drive to France and compete with. The drive was far enough to break-in the new engine. At least one Carrera 6 owner did exactly that.
In 1995, several McLaren F1s, a 3 seat, mid-engined supercar intended only for street use, were entered in the race and one lightly prepared example became the overall winner. Racing organizers were encouraging street supercar owners to compete, and the F1, with a 6.0 litre BMW V12 was well able to do so. Porsche racing manager Norbert Singer and engine designer Hans Mezger proposed a new Porsche racing car. It was based on the current 911, but converted from rear-engine to mid-engine for better handling, and powered by a productionized, all liquid-cooled engine replacing the more expensive, racing-only air-cooled cylinders and liquid cooled head designs from the 1980s. Actual street versions would be sold in the Supercar market, but the point was to build a winning racing car related to the street 911s, capible of beating the 600hp F1.