The company was established as an automobile manufacturing concern by René Panhard, Émile Levassor, and Belgian lawyer Edouard Sarazin in 1887. It had previously manufactured woodworking machinery. Levassor obtained a Daimler engine licence through his contact with Sarazin, and following Sarazin's death in 1887, Daimler commissioned Sarazin's widow Louise to continue the agency; she subsequently married Levassor, cementing the partnership. Panhard et Levassor sold their first automobile in 1890.
In 1891, the company built its first entirely original design: the Système Panhard, a four-wheel vehicle with a front-mounted engine, rear-wheel drive, and a crude sliding-gear transmission. This layout would remain the automotive standard for most of the following century. That same year, Panhard et Levassor shared their Daimler engine licence with bicycle manufacturer Armand Peugeot, who used it to form his own car company.
Panhard et Levassor competed in the very earliest motor races, winning events that were effectively road races between major French cities. In 1895, 1,205 cc Panhard et Levassor vehicles finished first and second in the Paris–Bordeaux–Paris race. Levassor himself drove one car solo for 48 hours and 45 minutes. However, a technical ruling denied him the official win because the vehicle was a two-seater rather than conforming to specific competition requirements.
For the 1894 Paris–Rouen event, Alfred Vacheron equipped his 4 hp Panhard with a steering wheel, believed to be one of the earliest employments of the device in a competitive motor vehicle. The Panhard et Levassor name appeared among the finishers at the top of the results sheet at Paris–Rouen, with René Panhard driving.
The company's racing dominance during the mid-1890s was substantial, with Panhards winning numerous events between 1895 and 1903 across the French city-to-city race format that characterised early motorsport. The vehicles were typically large, heavy, and powerful by the standards of their era.
Tragedy struck in 1896. During the Paris–Marseille–Paris race, Levassor was fatally injured in a crash while swerving to avoid a dog. He died in Paris the following year. Arthur Krebs succeeded Levassor as General Manager in 1897, under whose leadership Panhard et Levassor became one of the largest and most profitable automobile manufacturers in Europe before the First World War.
The Panhard rod — a suspension linkage that provides lateral location of a solid axle — was invented by the company and became widely used in automotive design across many manufacturers and eras. The device remains in use today, particularly as an aftermarket upgrade for vintage American cars, and the Panhard name survives primarily through this invention rather than through the racing marque itself.
Panhard et Levassor was also among the first manufacturers to work with sleeve-valve engine technology, beginning development under licence from American inventor Charles Yale Knight in 1910. From 1924 to 1940, all Panhard cars used sleeve valve engines.
After Levassor's death the company continued to grow under Krebs, reaching peak prestige before the First World War. The company produced presidential cars under Raymond Poincaré. During the war it concentrated on military trucks, V12 aero engines, and shell production. Peacetime production resumed in 1919.
The company was renamed Panhard after the Second World War (dropping "Levassor"), and produced light cars including the aerodynamically distinctive Dyna Z and the Panhard PL 17. Racing involvement continued informally through Panhard-based Monopole cars that won the Index of Performance class at Le Mans in 1950, 1951, and 1952, and through the Deutsch Bonnet cars of the late 1950s and early 1960s.
Citroën acquired full control in 1965, and civilian production ceased in 1967. The military vehicle division continued under various ownership structures, eventually becoming part of Renault Trucks Defense in 2012. The Panhard legacy in motor racing traces directly to the experimental, dangerous, and foundational city-to-city races of the 1890s, in which the company's innovations — particularly the front-engine layout and the adoption of the steering wheel — helped establish the technical vocabulary of the automobile itself.