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Every year approximately 70 million passenger cars are being produced and automotive industry is much bigger then just passenger cars. The impact of automotive industry on the environment is tremendous. From extracting raw materials through manufacturing and assembly processes, exploitation of the vehicle to the reprocessing irreversible, extensive environmental damage is done. The goal of this study is to show how implementing eco-design processes into supply chain management can reduce the impact of automotive industry on the environment by e.g. reducing the use of the fuel, increasing the use of recycled materials. Focus is on evaluation of current state, environmental impacts and potential improvements for design, raw materials, manufacturing and distribution and end-of-life phase.