[5][6] Beginning in August 1952, as part of efforts to spur development of an indigenous automobile industry, Brazil began enacting a series of progressively more restrictive laws that effectively closed their market to imports.

[7][8] The domestic manufacturers were usually divisions of larger multinational firms, and offered little in the way of sportscars, leaving local independent carmakers to fill the gap.

[9][21] In 1970, Leiding launched Projeto X (Project X), with the goal of developing a sportscar able to liven up Volkswagen's staid image in Brazil.

[24][1][25] Designers Márcio Lima Piancastelli, José Vicente Novita Martins, and Jorge Yamashita Oba were assigned to the project.

[27] The first prototype was handcrafted by Giuseppe Accasto, who had originally been sent to Brazil from Italy by Carrozzeria Fissore to handle projects for DKW-Vemag.

[4] Due to the car's modest engine output, a contemporary joke says that "SP" actually stood for "Sem Potência," Portuguese for "without power".

[31] Specifically, the SP2 lagged in comparison to its main domestic competitor, the Puma, which, although using a similar engine, was much lighter due to its GRP body.

Volkswagen do Brasil made plans to export the SP2 to the United States, but these fell through, in part due to the car's headlamps being too low to meet US safety standards.

[35] The body includes a "collision belt" that consists of the front and rear bumpers and bands of collision-resistant material down each side capped with rubber.

[36] The original design of the SP2 included energy-absorbing bumpers mounted on spring-steel "claws", a feature that was not implemented on the production cars.

[27] The suspension fitted to the early Brazilian Type 3 chassis underpinning the SP2 differed in some significant ways from its German counterpart, and has been said to more closely resemble that of VW's EA97 series of concept cars.

[38] The SP2's front suspension comprises upper and lower trailing arms and stabilizer bar, but in a departure from the German Type 3, the SP2's Brazilian Variant system retains the laminated transverse torsion leaf system of the Fusca, instead of the tubular torsion bars used on the German Type 3.

[40] The interior of the SP1 is more spartan than that of the SP2, with simpler seats, no leather option, and without the center console, reading lights, passenger handle, or oil temperature gauge and clock offered in the SP2.

VW's other concept was for a car that followed the outward appearance of the SP2 closely, but was to be built on a front-wheel drive (FWD) Volkswagen unibody platform and use a water-cooled engine.

It progressed to the stage where quarter scale models were produced, but did not go further due to disappointing sales of the similar Scirocco in Europe.

The SP2's characteristic air intakes gave way to discrete slots on the rear side windows, and a wide black grille sat above the front bumper.

The 1.8 L engine produced 100 SAE hp and remained in the rear; along with the car's air conditioning compressor, while a new radiator was mounted in the front.

Converting a VW SP2 to a Dacon SP3 cost 20% more than a brand-new Puma GTE, and the high price severely limited demand.

[46] In the late 2010s, a group of mechanical engineering students at Fundação Educacional Inaciana (Educational Foundation of Ignatius, or FEI College) decided to base their major project on a re-imagined SP2.