Selecting an Arduino for automotive Dashboard
For the kind of application described in the question, concerns for consideration include power spikes, EMI / transients on sensor inputs, and tough environmental conditions. 

Assuming that the LCD selected has a capable controller on board, and supports display primitives instead of just bit-blasting, the microcontroller memory is not a critical area. Such a controller is recommended anyway, so that display updates can be reasonably fast without unduly consuming microcontroller clock cycles. 

On the other hand, "dumb" LCD controllers which require all updates to be full-screen pixel maps, will strain the memory available in even an Arduino Mega 2560. Directly driving an LCD panel without a controller may not even merit consideration.

Keeping the above views in mind, an Arduino Uno will most likely suffice from a processor / RAM perspective, with some optimized coding effort, of course. 



To address the environmental and power / input line transient concerns, one recommendation is the Ruggeduino, a ruggedized Arduino Uno compatible board with fully buffered IOs, very good power protection and overall robustness far outshining any official Arduino board:

 

The 30 mA reset-able fuses and 24 Volt tolerance on every IO pin will probably justify the choice instantly. The board is fully compatible with the Arduino Uno, and cost-wise, the $39.95 is not significantly higher than the cost of the Arduino Uno. 



The question does not clarify which specific sensors are needed; One option could be the Gadget Shield, by the same manufacturers: 



From the product pages, this shield provides: 


  accelerometer, speaker, microphone, infrared transmitter, infrared receiver, RGB LED, four discrete LED’s, two pushbuttons, a potentiometer, and a visible light sensor




The weak link in this project will be the LCD panel itself. Under the extreme conditions a race car faces, the LCD panel will face risk of the glass breaking, or contacts coming off, at the least. 

While ruggedized displays are available, their pricing is orders of magnitude higher than hobby LCD panels, even ones with high-end controllers. So long as the purpose of the project is not mission-critical, i.e. nobody would be at risk if the LCD failed in live deployment, that additional cost may be unjustified for a student project.