The founders, Charles Chetwynd-Talbot, 20th Earl of Shrewsbury and Adolphe Clément-Bayard, reduced their financial interests in their Clément-Talbot business during the First World War.

Soon after the end of the war, Clément-Talbot was brought into an Anglo-French combine named STD Motors (Sunbeam, Talbot and Darracq).

Clément-Talbot was bought by Rootes Securities and continued to manufacture the same catalogue of vehicles quietly introducing components from Hillman and Humber cars.

In the postwar world of austerity the French government introduced punitive annual taxation on cars with engines larger than 2.6-litres and Talbot sales were severely restricted.

With mounting pressure on its core North American business, the decision was taken by Chrysler's then CEO Lee Iacocca to offload the ailing European operations.

The French Government persuaded both Renault and PSA Peugeot Citroën to bid for the company; as it was keen to keep Simca in domestic ownership.

Although PSA took responsibility for Chrysler Europe's considerable debts and liabilities, the move was a strategic one; acquiring Simca would remove a strong domestic competitor in the French market while gaining access to that company's expertise in small front wheel drive cars; while at the same time the old Rootes operations would give the company a stronger foothold in the United Kingdom – France's biggest export market where both Peugeot and Citroën lagged behind arch rival Renault.

To lead the new group, former British Leyland executive George Turnbull (who had just completed his secondment at Hyundai), was appointed as the managing director of the UK arm.

In 1981, Peugeot began producing the Talbot Tagora, a boxy four-door saloon marketed as a rival to the Ford Granada and to the Vauxhall Carlton/Opel Rekord.

At the end of 1984, the Alpine hatchback and its related Solara saloon were re-badged Minx and Rapier, depending upon specification rather than body shape.

It was a controversial decision, because the British arm of the company believed there was greater brand loyalty to Talbot in the UK, with its historical connection to the Rootes Group.

Partly because they were perceived as "British" (despite most of their content actually being imported from PSA's French factories), the 309 and the subsequent 405, 306 and 206 models were very successful in the UK market, and regularly featured among the country's top ten best-selling cars.

It became clear however, that there was no long-term future for the Talbot brand in 1986 when PSA sold the Whitley research and development centre to Jaguar, signalling the end of any more British-developed models.

According to the website How Many Left?, as of June 2016[update] there were fewer than 40 Alpine/Solara models, 20 Horizons, 10 Sambas and only one Tagora still registered with the British Driver & Vehicle Licensing Agency, compared to well over 5,000 Talbot Express vans, the vast majority of which are motorhomes.

Talbots came fourth and fifth in the inaugural World Championship race, the 1950 British Grand Prix, piloted by Yves Giraud-Cabantous and Louis Rosier respectively.

In the team's inaugural season in the series, Tony Pond drove the Talbot Sunbeam Lotus to fourth place at the 1979 Rallye Sanremo.

Although the team's only win came at the Rally Argentina, driven by Fréquelin, consistent podiums and points-scoring finishes saw Talbot take the manufacturers' title.

The 1982 season saw the series dominated by the four-wheel-drive Audi Quattro, and with Group B regulations coming up, Talbot withdrew from the WRC.