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Once the Rover 213 (SD3) had been launched and the Rover 800 (XX) was well underway, thoughts turned to a replacement to the SD3. This time the co-operation between Austin Rover (ARG) and Honda would go beyond anything experienced before and, unlike the SD3 (which was initially a mildly reworked Honda Ballade), this car was jointly-designed by engineers from Austin Rover and Honda. The new car would not only replace the then current SD3 Rover 200 but the Maestro and Montego as well and so because of this it was always planned to design 5 door as well as 4 door versions. By 1985 both ARG and Honda understood their strengths and weaknesses and so ARG lead the project in terms of interior packaging and styling, dashboard, seats, and importantly suspension tuning. Roy Axe led the overall styling of the car for ARG and the team gave the car a very British look. The engineering teams worked well together to achieve a common bodyshell for both Honda and ARG. Honda also supplied much of the switchgear and instrumentation. The Rover vehicles were codenamed R8 whereas the Honda vehicle were initially codenamed YY (following on from the XX Rover 800/Honda Legend project) and latterly EJ.

Having fought hard with the UK government for funding for a new engine range, the Rover version of the car was always destined to include the new ‘high-tech’ "K" series engine. Rover considered the new engine so important that it was 'launched' to the press shortly prior to the car itself.

Graham Day took over as Chairman of the company in 1986 and immediately stated his intention to move the company up market and as part of this strategy the company was renamed “Rover Group”.  The success of the previous Rover 200 made it inevitable that the new R8 would be branded a Rover. By the time of the launch in October 1989 Rover realised that they had a great package and to maximize its potential they had already made the decision that their car would go beyond the two jointly designed 5 and 4 door models, which were launched in 1989 as the Honda Concerto and Rover 200. The latter was the first car to be introduced by the newly privatised Rover Group PLC, which was now under the wing of British Aerospace. The 4 door 400 saloon followed quickly in April 1990, and this time with the sporty 416GTi gunning for BMW.  The 3-door models, with both lower-priced and GTi versions were launched in 1991. All vehicles for the European markets, both Rovers and Hondas, were produced by Rover Group on the same production line at Longbridge in Birmingham.

At launch, the cars were priced above their immediate rivals to capitalize on their high-tech engines, classy interiors and high build quality.  To avoid the risk of alienating the bottom end of their customer base it was decided to continue production of the Maestro and for a short while the SD3.  The plan worked and the press raved about the new R8 and accepted the ambitious pricing as being justified. Many accolades were bestowed on the car by the press. What Car! voted the 214Si their car of the year. Finally, Rover had a winner on their hands and with other models in the pipeline they could keep the momentum going.

Rover had planned further derivatives of the R8 platform but these were designed completely independently from Honda. In 1992 the Cabriolet became available, with the Coupe following later the same year and the Tourer in 1994. Here was Rover, platform sharing, years before much of the European motor industry started doing the same.

The Cabriolet, Coupe and Tourer were codenamed ‘Tracer’, ‘Tomcat’ and ‘Tex’ respectively during their development, the first 2 having been chosen from suggestions of employees working on the projects.

A wide family of engines were also available in each body style, with the award winning "K" series being launched as a 1.4 and the 1.6 Honda "D" series in 1989. In 1991 the 2.0 "M" series engine was added to the GTi range, being replaced by the "T" series engine in 1992. Turbocharged versions of the "T" series engine were available in the hatchback, Saloon and Coupe producing 200PS. In 1992 the Peugeot "XUD" diesel engine was added to the range in both naturally aspirated and turbo form. With the "T" series Turbo the 200 became a devastatingly rapid car for the money. It was capable of a genuine 150mph which was proved when 2 Coupes, built and run by a group of Rover employees and those working at several of Rover’s key suppliers, ran for 24 hours at the Millbrook test track in Bedfordshire and broke 37 UK Land Speed records, many of which are still held today.

The high-performance derivatives were initially badges ‘GTI’ and ‘GTi Turbo’ as per the market norm at the time but were rebadged ‘GSi’ and ‘GSi Turbo’ in an attempt to reduce spiralling insurance costs which were prevalent at the time due to the number of car thefts.

In 1996 the 2.0 "T" series and 1.6 Honda "D" series (with the exception of the automatic) were removed from the range being replaced by the 1.6 and 1.8 "K" series in both standard 16-valve and VVC forms. The Coupe, Cabriolet and Tourer also received a revised interior from the newly introduced R3 model.

The Hatchback and Saloon ceased production in 1995, but the Coupe, Cabriolet and Tourer were produced until 1999.