The second generation 400 Series, code named Theta or HH-R, was launched in the summer of 1995 as a hatchback, and later as a saloon.
This time, it was based on the Honda Domani, which had been released in Japan in 1992, and was sold as part of the European Honda Civic range in five door hatchback form. It was no longer as closely related to the 200 Series, which was revised independently by Rover but still shared many components with the 400.
Power came from 1.4 and 1.6 litre K-Series, 1.6 litre Honda D series SOHC (Automatic gearbox only) and 2.0 L Rover T Series petrol engines, as well as a 2.0 litre L-Series turbo diesel from the more luxurious 600 Series.
The Rover 400 might have been marketed as a small family car, as it compares closely in size and engine range with contemporary models such as the Ford Escort and Vauxhall Astra. Instead, Rover priced the car to compete with vehicles like the Ford Mondeo and Vauxhall Vectra.
This version of the 400 was initially popular, being one of Britain's best selling cars between 1995 and 1997. But within three years, it was being outsold by traditionally poorer selling cars, such as the Volkswagen Passat and Renault Laguna.
The Rover 400 was face lifted in October 1999, to become the Rover 45. It was re positioned and priced to compete with the Ford Focus and Vauxhall Astra, rather than larger cars like the Ford Mondeo and Vauxhall Vectra.
The 1.4 and 1.6 litre K series petrol and 2.0 litre L series diesel engines were carried over from the 400 Series, along with the introduction of a 1.8 K series and a 2.0 litre V6 from the larger Rover 75 (replacing the 2.0 T series four cylinder petrol unit) – although this power unit was only available on saloon versions. The 45 came equipped with the better seating of the 75 and whilst the 400 models handled very well, the suspension was tuned to give much better controlled ride characteristics with quicker steering.
A facelift in the spring of 2004 was MG Rover's last effort to boost sales of the Rover 45, including a new front and rear end styling, a redesigned interior with refreshed dash, centre console and new switchgear, revised suspension settings, improved equipment and lower prices.
Some of these changes were necessitated by the end of Domani production in Japan, as Honda refused to continue the supply of certain parts.
Production of the car stopped in April 2005, due to the bankruptcy of MG Rover. Honda swiftly terminated the licensing agreement with MG Rover, and removed the remaining tooling and assembly lines for the car from Longbridge prior to its sale to Nanjing Automotive, which meant that no versions of the Rover 45/MG ZS were ever produced by Nanjing Automotive.