The history of Lamborghini had been distinguished by the construction of extraordinary sports cars that had no need to draw on the experience – intriguing but also very expensive – of a Racing Department. From the very beginning, Ferruccio had made it clear that he had no intention of funding these expensive adventures and that was how the company had always operated.
The arrival of Chrysler, and of various executives who were hypnotised by the glamour of auto racing, changed this attitude as well. Towards the end of 1987, the French Formula 1 team Larrousse asked Mauro Forghieri, the celebrated designer of Ferrari's finest models from the Sixties and Seventies, to create a new engine, and he turned to his good friends at Lamborghini with the proposal of embarking on the project together. After obtaining Chrysler's approval, Forghieri designed his engine, a V12 with a 3.5-litre capacity, the maximum displacement allowed by regulations. A new parallel structure, separate from Lamborghini and named Lamborghini Engineering, was established in Modena specifically for this engine. The speed of the designer from Modena and of the organisations with which he worked was renowned. Ready within a matter of months, the new engine was officially demonstrated to the public in April 1988.
Naturally, the news was sensational. The debut in Formula 1 racing of a company like Lamborghini – long the master at producing high-quality, top-performing twelve-cylinder engines – was a major event, and one that could cause plenty of headaches for Lamborghini's direct rivals. Moreover, the commitment and risk for the company were still rather limited, given that Lamborghini was simply supplying engines to the Larrousse team, which obviously pledged to pay for them. The 1989 season was rather disappointing, but the fault for these poor results lay above all with the French team, which did not have the money and organisation required to compete at the highest levels. Nevertheless, the engine showed excellent potential that deserved to be exploited. As a result, even a titled team like Lotus requested Lamborghini engines for the following season.
Thanks also to this double supply of engines to two teams, the results for 1990 were nothing short of brilliant. At the end of the British Grand Prix, Bernard won an extraordinary fourth place and Suzuki placed sixth. The Hungarian Grand Prix was even more rewarding for the Lamborghini engines, which placed fifth, sixth and seventh, respectively with Warwick (Lotus), Bernard (Larrousse) and Donnelly (Lotus). Nevertheless, the best placement of the whole season came from Suzuki on his home turf at the Grand Prix in Japan, as he placed third and gave the company its first podium finish. This was the best placement ever achieved by a Lamborghini engine in all its seasons of activity.
The finale of the 1990 season – definitely on the rise, with 14 points racked up by the teams with a Lamborghini engine – understandably fuelled the excitement in both Sant'Agata and Detroit. Thus, a wealthy Mexican businessman decided that, in the wake of this success, he would place an order with Lamborghini not only for a F1 racing engine, but for an entire car. The opportunity was obviously too good to pass up, and once the customer's ample finances were confirmed, Forghieri and his team briskly went to work on the entire project. The single-seater was a relatively conventional one, but its design showed great attention to detail and it brought together all the experience gained by the Modena designer throughout his long career. In particular, it made the most of the data collected over two years of working with the teams using this engine. The new car was entered into the 1991 world championship season, but suddenly the Mexican backer mysteriously disappeared (he was never heard from again) and, at this point, there arose the serious problem of financing the team. An Italian industrialist came forward, offering to make up the shortfall to race the car, which was thus able to participate in the world championship that year as the ‘Modena Team'.
That season, Lotus and Larrousse decided to forgo the Lamborghini engines, which were requested instead by Ligier. But the effort involved in following an entire racing team and outsourcing engines – and with decidedly inadequate funding for this purpose – aggravated the already known problems, and the season of Lamborghini's single-seater was not a thrilling one. If greater financial resources had been available, it would probably have been possible to find better solutions to the various problems that arose during the season. However, Chrysler inexplicably refused to support this activity in any way, even when it became evident that the economic problems faced by Lamborghini Engineering would trigger a drop in the performance of the F1 car and thus a problem in terms of brand image. Despite Forghieri's commitment, the American company's insensitivity to this problem led to a progressive decline in automotive performance and the 1991 season ended negatively, with the definitive withdrawal of the Modena F1 Team from the world championship. Now this lovely single-seater can also be admired at the Sant'Agata museum, and it represents one of the most important missed opportunities in the history of Lamborghini.
The 1992 season saw the return of Lamborghini as the engine supplier for the Larrousse and Minardi teams, the latter coming out of a difficult season with Ferrari engines. In 1993, the Modena company supplied V12 engines only to Larrousse. In both seasons, enormous engine problems arose, reflecting the lack of funds available for the technical development of the engine. The fact that it was fundamentally a well-designed engine is proven by Ayrton Senna's interest in it, and the Senna tested a Lamborghini engine on the McLaren he was driving at the time. The agreement was in place and ready to be signed when Peugeot, which wanted to return to Formula 1 racing by supplying one of its engines to a high-profile team, stepped in and the deal fell apart, thereby ending Lamborghini's adventure in the world of Formula 1 racing. The firm continued, with good overall results, to compete in the field of marine engines, an area that was completely foreign to the original philosophy of Lamborghini cars but allowed it to achieve important results in specialised championships like powerboat racing.Source - Lamborghini