The Suresnes factory was originally built by Alexandre Darracq, whose pioneering car manufacturing business began in 1896 and rapidly became famous for racing success before he sold his remaining stake in 1912. New owners renamed the operation Automobiles Talbot in 1922, continuing to use the Darracq name for competition cars. Because a British Talbot brand also existed, French products sold in Britain were badged Darracq-Talbot or Talbot-Darracq.
Antonio Lago, an Italo-British businessman and engineer, was appointed managing director in 1932 in the hope of reviving the struggling company. When the firm entered receivership in 1934, Lago managed to complete a management buyout in 1936 and restructured the business under the Talbot-Lago name.
Under Lago and engineer Walter Becchia, the company produced a range built around four standard chassis lengths. The sporting models centred on a six-cylinder 3,996 cc engine available in various states of tune: the Lago Spécial with twin or triple carburettors, and the Lago SS on an extra-short 2,650 mm wheelbase with triple carburettors. Coachbuilders such as Figoni et Falaschi and Saoutchik clothed many of these cars in striking aerodynamic bodywork, including the T150 coupé's notably streamlined form. These pre-war sporting Talbots earned a strong racing record.
During the war years, Carlo Machetti joined Lago, and together from 1942 they developed a twin-camshaft 4,483 cc six-cylinder engine that would underpin the post-war programme.
In 1946 production resumed with the new twin-camshaft engine, designed under Carlo Marchetti's leadership. The Talbot Lago Record T26 (1946–1952) used this 4,483 cc inline-six producing approximately 170 hp, with a four-speed gearbox and optional Wilson preselector unit, and a claimed top speed of 170 km/h. It was sold as a four-door sedan and two-door cabriolet, with some coachbuilt specials by firms such as Graber.
The Talbot Lago Grand Sport T26 (1947–1954) extracted 190 to 195 bhp from the same engine and was capable of around 200 km/h depending on bodywork. Delivered only as a bare chassis requiring bespoke coachwork, only twelve examples were built in 1948, its first full production year. The Grand Sport directly shared technical features with the T26C Grand Prix car — aluminium cylinder head, hollowed camshaft, multiport exhaust, and triple carburettors — and Louis Rosier and his son Jean-Louis used a T26C-GS variant to win the 1950 24 Hours of Le Mans.
The Talbot Lago Baby (1948–1951), a four-cylinder 2,690 cc model, was intended to attract buyers deterred by France's punitive taxation on large-engined cars. A Baby/6 Luxe version fitted the six-cylinder Record engine in the shorter Baby chassis.
The Talbot-Lago T26C racing car, built to Formula One regulations, debuted at the 1948 Monaco Grand Prix and finished second in Louis Chiron's hands. Grand Prix victories came in 1949 when Louis Rosier won the Belgian Grand Prix and Chiron won the French Grand Prix. The car competed in the early World Championship seasons and Doug Whiteford drove T26Cs to Australian Grand Prix victories in 1952 and 1953.
Production figures reveal the company's deteriorating position: 155 cars in 1947, 178 in 1948, 433 in 1950, dropping to 80 in 1951, 34 in 1952, and approximately 17 in 1953. Post-war French government policy worked against luxury manufacturers: punitive taxation on engines above two litres, and the Pons Plan that channelled resources to just five approved automakers, made the market for expensive large cars almost impossible to serve profitably.
In 1951 courts granted a debt moratorium, permitting limited production to continue but damaging the company's credit standing. In 1955 Talbot-Lago launched its last new engine, a four-cylinder 2,491 cc unit called the T14 LS in the Talbot-Lago 2500 Coupé, but only 54 were built. For 1957, the company resorted to buying in a BMW V8 engine and rebranded the car as the Talbot Lago America. Market response remained lukewarm; only about a dozen BMW-powered cars were produced. In early 1958 Lago accepted an offer from Simca president Henri Pigozzi, transferring the brand to Simca in 1959. The remaining unsold Americas were fitted with Simca's own 2,351 cc V8 instead. Antonio Lago died in 1960.
Talbot-Lagos have become among the most prized automobiles at international auction. A Figoni et Falaschi-bodied T150C SS Teardrop Coupé sold for $3,535,000 at Christie's Pebble Beach sale in August 2005; another example reached $3,905,000 at Palm Beach in January 2006, where it was voted Best in Show. A third T150C SS achieved $4,620,000 at RM Auctions at Pebble Beach in 2010. A T150 C SS with Pourtout Aerocoupé bodywork designed by Georges Paulin fetched $4,847,000 at Bonhams at Quail Lodge in 2008. An unrestored 1948 T26 Grand Sport with Oblin coachwork forms part of the permanent collection of the Simeone Foundation Automotive Museum in Philadelphia. A 1949 T26 Grand Sport Coupé by Saoutchik from the Baillon Collection sold for €1,450,000 at Artcurial in February 2015.