This transaxle model combines the functions of a Transmission and a Differential (both available as separate kits). Transaxles are typically found in cars where the engine is at the same end of the car as the motor: they are more compact that the two component separately.
The transmission portion of this model implements a two-speed automotive-style transmission complete with shift lever, forks, and two dog clutches for engaging and disengaging the high and low gears. The differential portion uses a clever arrangement of four gears to allow the two drive wheels to spin a different speeds, even though they are being powered by a single drive shaft. Turning at different speeds is necessary to go around a corner, where the outside wheel needs to travel farther, and thus turn faster, than the inside wheel.