In 1984, Peugeot sought to enter the FIA Group B rally car racing series, which required manufacturers to use modified versions of their existing vehicles.

Working with Heuliez and fellow marque Simca, 200 "Turbo 16" models were built based upon the subcompact 205 for the purpose of homologation.

[3] The decision was also made to leave much of the area above the engine exposed in an effort to display the vehicle's racing internals.

[4] On the dashboard, a primitive iteration of a multimedia system was implemented, featuring a CRT screen and numerous audio controls.

[8] Like on the T16, the suspension was very similar in design to that of Formula One cars,[9] and various components were made of kevlar or carbon fibre for weight reduction.