Though, in the automotive industry, technology is considered as a source of innovation and development, emerging change in consumer perception has brought industry focus on design. Evolution of this industry is closely related to the convergence of technology and design. In such context, implication of design driven innovation strategy in the automotive industry has potential to be explored and to create sustained competitive advantage through balancing customers’ need, technological opportunities and product meaning. The aim of this paper is to give a holistic view of design driven innovation as a differentiation strategy in the automotive industry and its implication for strategic management through some relevant research reviews and empirical information. On the contrary, this research lacks detailed description on industry practice to provide greater breadth, since it attempts to correlate the strategic concept of design with the dynamic capability of a firm in that particular industry.