For the 1968 Cougar, not much changed for the model in its second year of production. The addition of federally mandated side marker lights was the major change, but the biggest changes were under the hood and in performance for the XR-7 model. A 210 hp (157 kW) 302 in³, 2-barrel V8 was the base engine on all XR-7s and early standard Cougars. Three new engines were added to the option list this year: the 230 hp (172 kW) 302 in³, 4-barrel V8; the 335 hp (250 kW) 428 in³, 4-barrel V8; and the 390 hp (291 kW) 427 in³, 4-barrel V8. In addition, the 289 in3 engine was made standard on base cars without the interior decor group mid way through the model year. Mercury was serious about the Cougar being the performance icon for the company. The XR-7G, named for Mercury road racer Dan Gurney, came with all sorts of performance add-ons, including a hood scoop, Lucas fog lamps and hood pins. Engine selection was limited only to the 302, 390, and 428 V8. A grand total of 619 XR-7Gs were produced, and only 14 G's were produced with the 428 CJ. The mid-year 7.0 L GT-E package was available on both the standard and XR-7 Cougars and came with the 427 V8. The 428 Cobra Jet Ram Air was available in limited numbers on the GT-E beginning 1 April 1968. Conservatively rated at 335 hp (250 kW), the 428 Cobra Jet could produce much more (306 kW (410 hp)) from the factory. A grand total of 394 GT-Es were produced, 357 with the 427 and 37 with the 428.
Source: Wikipedia, 2011