The Porsche 911 is a sports-car icon, but the German brand is preparing some back-up in the face of stiff supercar competition.

Porsche has admitted it has begun work on a new mid-engined model to go head-to-head with the likes of the Ferrari 458 Italia and McLaren MP4-12C.

Expected to be unveiled in 2015, the 960 (as the project has been dubbed) will slot between the 911 and forthcoming 918 hybrid supercar in terms of price and performance. That means a price tag of about NZ$600,000 to challenge the 458 and MP4-12C. Thanks to Volkswagen Group's takeover of Porsche, the 960 is expected to share underpinnings, at least in part, with the next-generation Lamborghini Gallardo and Audi R8 that are also part of VW Group.

Exactly what engine will sit behind the driver remains the biggest mystery about the car. Overseas reports have been rife with speculation the car will be powered by a 450kW twin-turbo six-cylinder boxer engine, similar to the 911 Turbo and its GT2 stablemate.

Another option could be the new twin-turbo V6 engine that is under development. There is also a chance that Porsche will choose a new eight-cylinder engine, either an all-new boxer or an updated version of its V8 used in the Panamera and Cayenne. That would at least give it a numerical match to its rivals and further separate it from the 911.

Engineering work on a new turbocharged flat four-cylinder engine, which could be offered in Porsche's long-rumoured entry-level roadster, has made development of the eight-cylinder boxer easier.

The 960 is expected to use a stiff and lightweight carbon-fibre monocoque chassis to put it on a par in technology terms with the McLaren.

- Sydney Morning Herald