Ordered by Ferry Porsche to come up with a production-feasible concept for his new model, Fuhrmann initiated a design study in 1971, eventually taking from the process the final specs for the 928. Several drivetrain layouts were considered during early development, including rear and mid-engined designs, but most were dismissed because of technical and/or legislative difficulties. Having the engine, transmission, catalytic converter(s) and exhaust all cramped into a small rear engine bay made emission and noise control more difficult, something Porsche was already facing problems with on the 911 and wanted to avoid. After deciding that the mid-engine layout didn't allow enough room in the passenger compartment, a front engine/rear wheel drive layout was chosen. Porsche also feared at the time that the U.S. government would ban the sale of rear-engined cars in response to the consumer outrage over the Chevrolet Corvair, started by Ralph Nader via his book "Unsafe at Any Speed".
Porsche engineers wanted a large-displacement motor to power the 928, and prototype units were built with a 5.0 L V8 producing close to 300hp (220kW). Very early units used one four-barrel carburetor, which was eventually rejected in favor of Bosch's K-Jetronic fuel injection system. When increasing concern within the company over the pricing and availability of fuel during the oil crisis of the 1970s became an issue of contention, smaller engines were considered in the interest of fuel economy. A push began for the development of a 3.3 L 180hp (130kW) powerplant they had drawn up specs for, but company engineers balked at this suggestion. Both sides finally settled on a 4.5 L, SOHC 16-valve V8 producing 240PS (237hp/177kW) (219hp (163kW) in North America), which they considered to have an acceptable compromise of performance and fuel economy.
The finished car debuted at the 1977 Geneva Motor Show before going on sale later that year as a 1978 model. Although it won early acclaim for its comfort and power, sales were slow. Base prices were much higher than that of the previous range-topping model and its larger size; the 928's futuristic styling put off many purists who were more attracted to the more compact 911.