ABSTRACT In the development of automobiles transmission system occupy a very important position. To get the efficient transmission system with smooth running, the present day automobile industries are using a new technology for power transmission, which came in to light recently. Preferences for one transmission type or the other vary, not only among drivers but also among regions. U.S. consumer preference has swung heavily over the years toward the automatic transmission; while as many as 90 percent of European drivers prefer the manual. It is in these markets that a third transmission type - a hybrid of the other two - offers the potential for future dominance. This paper mainly focuses on the transmission system of an automobile and dealt with the modifications made to existing transmission system for reducing the jerky motion and to increase the efficiency of the vehicle by using the new technologies called Automated Manual Transmissions (AMTs). This paper elucidates what are AMTs, and mechanism behind them, and the disadvantages in the automatic transmission, manual transmission and a clear cut of the application and advantage of these AMTs are discussed here. The paper emphasizes on the tremendous impacts that will have in the near future.