Auto sector is one of the important sector for the development of Indian Economy. It provides employment directly and indirectly, contributes around 7% in GDP. Recently we noticed, this sector is facing worst crisis and around 2.30 lakh jobs have been lost also 10 lakh jobs have been hit in the auto component manufacturing industry. Economic conditions had changed after implementation of demonetisation, GST and Bankruptcy code. But the biggest factor is liquidity provided by shadow banks to an auto sector. The banking sector is one of the reasons that had affected the growth of the auto industry. This sector is facing crisis not only for decreasing demand but also for regulation and technical changes. This paper focuses the recent financial crisis and its impact on auto sector. Also this paper recommended some suggestion for the improvement of auto sector. In this paper, we are discussing the steps taken by government to handle economic slowdown.

KEYWORDS:  Auto Sector, Financial Crisis, Indian Economy Shadow Banks, Economic Growth.