Automobile industry is one of the most competitive industries nowadays. In order to sustain in this competitive world the manufacturers have to include suitable modification in their design. Modifications are done in design with a view to increase the comfort of driver as well as passengers. Sensors are incorporated in automobile to determine various parameter and to enhance safety and to improve efficiency of the automobile. These are actually electro-mechanical devices which convert the physical quantity to electrical signal. The signals are send to control unit which take necessary action to control the parameter. Many of the research projects are currently underway in designing electronic control system for automobiles. These so called drive-by wire system are becoming wide spread in automotive engineering. Many of direct link between driver and vehicle control have been supplemented by electronic connection . These electronic control system heavily depend on sensors for collecting information from various parts of a automobile. The paper reviews the current practice in sensors and their application in automobile. In the past the driver had direct control over the vehicle by mechanical linkages. Nowadays these mechanical linkages are replaced by wiring harnesses and an electronic interface is present between driver and the vehicle. These so called drive-by-wire systems enable the driver a safer, easier driving at the same time optimizing economy, emissions and performance of engine. These systems are heavily dependent on sensors for collecting necessary data regarding the vehicle. The various electronic control systems that use sensors are engine management systems, anti-lock braking system, active suspension systems, different safety system etc.