The advancement of automobiles (thereinafter auto) during these decades has not only made great contributions to the economic development, but also significantly changed people’s life. Apparently, the auto industry has entered an innovation race. Among extant literature, organizational culture (OC) has positive impact on innovation capability (INC), whereas little research concerns about how OC influences organization’s capabilities through knowledge management (KM) activities, especially for knowledge sharing (KS) taken in a firm. This study aims to explore the effect of OC and KS on INC in the knowledge-intensive auto industry. Questionnaires are given to 6 whole-car manufacturers, 49 parts suppliers, and 7 car dealers in Taiwan. 449 valid questionnaires are returned, and an empirical analysis through structural equation modeling (SEM) is performed. The result shows that KS is the mediating variable of OC and INC, and OC has a significant positive effect on KS.