Indian Demonetization has shaken the economy and lots of mix response has recorded, few industries are hoping to get positive impact whereas few fear to get hard hit. Automobile industry is one such which has negative impact. Sudden announcement of demonetization has resulted into insecurity and fear among automobile buyers where major part is cash sales. The commercial and passenger vehicles were the harder hit. Automobile industry lists into major industry contributing to economic wealth for country. In this conceptual study attempt is made to understand impact of demonetization on automobile industry.