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This article over at Pistonheads talks about Lotus Engineering's work in the field of low displacement turbocharged cars, this is something they're really advocating according to the article. They're plan on having a 1.7l powerplant in a 'demonstrator vehicle' within 12 months. While the vehicle will probably be an Elise (logical choice for their goals), whether or not that becomes the S3 is questionable (probably not).