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The Tempest was the result of a decision by the Pontiac division to enter the compact car market following the success of the Chevrolet Corvair. The division wanted to produce a clone of the Corvair, but instead GM gave Pontiac the lead to develop a new car in an interdivisional program coded named "X-100." John Z. DeLorean, Pontiac's chief engineer and general manager, went to work on a car that would meld components GM already produced. His objective was for the new model to be more than just an ordinary compact car. The Tempest was Motor Trend magazine's 1961 Car of the Year. Road & Track praised the Tempest as "exceptionally roomy" and "one of the very best utility cars since the Ford Model A." In hindsight, DeLorean admitted that the Tempest was "less than successful," adding, "there was no mechanical problem, but the car rattled so loudly that it sounded like it was carrying half-a-trunkful of rolling rocks."
It shared sheet metal with the Oldsmobile F-85, (although) the first-generation Tempest had several features that differentiated it from the other compact GM cars. The engine was a 195 cubic inch (3.2 L) straight-4 marketed as the "Trophy 4," derived from the right cylinder bank of Pontiac's 389 cubic inch "Trophy 8" V8 engine. The Tempest featured a drivetrain with a rear-mounted transaxle that was coupled to a torque shaft arcing in a 3 in (76 mm) downward bow within a curved, longitudinal tunnel. Use of the torque shaft was the result of being forced to use the Corvair floorpan which, being a rear engine platform, had no drive shaft. To combine flexibility with strength in the proper proportion, the shaft was forged of SAE 8660 steel (high nickel, chrome and molybdenum alloying percentages) for torsion bar specifications. For automatic cars, the shaft was 0.65 in (17 mm) in diameter and 87.25 in (2.216 m) long, while the manual-box shaft was 0.75 in (19 mm) by 82 in (2.1 m). This joined the forward engine and the rear transaxle (therefore no transmission hump) into a single unit, helping to reduce vibration. The design, known as "rope drive," had only been seen previously on General Motors' 1951 Le Sabre concept car.
The combination of a rear-mounted transaxle and front-mounted engine very nearly gave the car an ideal 50/50 front/rear weight distribution.