It depends on what features are enabled in the car, but the way most cars perform (shift points, fuel trims (air/fuel ratio), throttle response, handling (stiffness of shocks/dampeners), speed of steering, firmness of shifts) are increasingly controlled electronically. Meaning, the computer in the car controls how they “feel” versus actual mechanical connections like an older car.
This allows car manufacturers to use similar parts in a variety of cars, and then uses the computer to tailor the driving experience to the driver or conditions. A cars “base” settings are a compromise of abilities in a variety of situations.
If you’re sitting in traffic, you don’t want FIRM shifts because you’re going to be shifting a lot, and you don’t want a touchy throttle that wants to launch the car every time you tap the throttle. You want the experience to be smooth.
However, if you’re going on a spirited drive – you DO want those things. You want the car a little lower, to handle a litter firmer, to have more response in the throttle, shift points that are higher in the rev range, faster steering inputs, etc.
So a “SPORT” Button simply changes the electronic configuration of a variety of driving inputs, to make the experience more, well, Sporty – usually where changing those things may make daily driving the car more uncomfortable or less economical.
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