A lot of components of a modern car, including engine, drivetrain and chassis – the things that dictate how a car behaves – are controlled by computers these days. The engine may load a different power profile giving it a bit more spunk, the shifting may favor speed over comfort, the suspension may get firmed up so the car can corner harder and so on.
By default every setting will be a compromise of all aspects. Sure you want the car to be quick but it should also be comfortable, not too thirsty and maybe not needing a service every 500 miles. The sport mode shifts all the knobs it has towards a more performance oriented approach, compromising at the cost of other aspects of driving.
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