Today's interest is focusing on growing demand for more fuel-efficient vehicles to reduce energy consumption and air pollution which become a challenge for the current automotive industry. Driven by this requirement, researchers had done many researches to find a suitable material that fulfill the requirement for automotive parts. In this paper, general application of magnesium and aluminum alloys in automotive industry is presented, especially about the material properties, machinability and cost comparison of these alloys. In addition, the current and potential automotive applications of magnesium are reviewed, and the technical challenges for these applications are also discussed. Based on the previous studies, it was found that the magnesium has several advantages over aluminum in terms of manufacturability due to its mechanical and physical properties. Revolutions to reduce the average fuel consumption have nowadays revived the interest in magnesium. Furthermore, the application of magnesium alloys in automotive has witness the developments and successful application of these alloys in automotive component such as steering wheels, steering column parts, instrument panels, seats, gearboxes and air intake systems. Future developments include a potential application for car body, cylinder blocks and engine block. Through the reviews done, aluminum alloys are found widely used but market for magnesium alloys for automotive application is predicted to rise and will rapidly increasing in the near future.