It's all about how much you are increasing your velocity. If you double the velocity, then the 02 could theoretically be double the distance of current location.
However, we know the velocity isn't going to be doubled. I'd be shocked at a 5% gain. We are all assuming that the current manifold is a hindrance to exhaust flow. As low a performance motor as the metro is, it may not be much of a hindrance. However, it certainly couldn't hurt to clean up the flow a bit. It might be worthwhile to find an old manifold and have it bench flowed just to see what it can flow.
The other issue is heat - O2s require lots of it to function properly. Too far from the heat source, they don't stay hot enough, causing a false read for rich condition.
I only know this due to working on custom tunes for mustangs. Some year models ran into issues with long tube headers that moved the O2 sensor 18" past normal location. These cars ran into idle issues. It was fixed by tweaking a parameter in the EEC that was related to delay on readings from the 02.
Also, the 02 needs to be located on the top side of the pipe, or as close as possible to it. They are very sensitive to water.
And finally, when looking at the piping size and such, why not look at motorcycles in the same HP range? Yes, I know efficiency and such is different, but might be a good starting point. Specifically on cruiser bikes, not crotch rocket liter bikes of course.
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