The Indian automobile car industry is going through lot of changes in the past few years; partly due to government introducing stringent emission norms and also the adverse economic impact of covid-19 on automobile industry. Covid-19 has resulted in great loss of earnings of people and the result is less demand for the car industry. Many car manufactures continue to launch new models every year, but what is needed for this companies is to focus on minimising cost so as to survive in this heavily competitive market, which in fact is dominated by 3 to 4 companies. This paper tries to evaluate the economic impact of covid-19 on the automobile car industry. The car industry is now relying on internet of things with use of artificial intelligence to make the car manufacturing process a complete use of sophisticated technology. This has helped companies to make smart cars with more safety.