That basic engine design has been race tuned up to 400+ Bhp by FIAT. Very capable, but depends on how much $$$$$$ one wants to spend on it. Performance parts can be an issue, but that depends again on your goals and budget.
Use the Lancia transaxle as the stock X transaxle won't deal with the increased power too well and likely develop problems. As power goes up, the need for a limited slip diff could be another issue to deal with.
Much to consider here.
IMO, it's better and more cost effective to use a modern drive train like a Honda K20A for a host of reasons including performance parts availability and tune ability.
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