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With gas prices at historic highs and fuel-efficient cars in vogue, the time might be perfect to introduce the Smart Car. The chief goal of this paper is designing a smart car with transportation capabilities of a traditional car. The project introduces ways of making car to sense the environment and navigating on its own. The algorithm is implemented using a freescale’s32-bit MPC5604 microcontroller and CODEWARRIOR (IDE) software. It is based on Free Ranging on Grid Technology (FROG) which uses Automated Guided Vehicle Systems (AGV), which are driverless cars. An AGV is a robotic device that follows marks in the floor. The fundamental requirement for this smart car is to sense the given track in a most efficient and in a considerably very short time. The actuators used for lateral and longitudinal control were a servo and a D.C motor respectively. Thus a model car can be designed with electrical, electronic and mechanical systems and can be travelled in smoother and faster way in the track by electromechanical control. In such automated systems, vehicles are programmed to have various features to ensure smooth car navigation, traffic signal control, cameras to monitor and systems to maintain appropriate speed limits etc. Thus in future, this kind of smart cars acts as an intelligent transport system.