The closed atmosphere of the automobile gives rise to a number of unwanted environment including bad odour and growth of various microorganisms. To overcome the bad odour there has been a number of methods and also finishing techniques to avoid the growth of microorganisms. In the present study, encapsulation of various essential oils like lemongrass, lemon and lavender in chitosan walled microcapsules were tested. In this, Chitosan was opted for this study because of its film forming ability and intrinsic antimicrobial characteristic. The 100% PET, 100% PE of nonwovens were tested in this study, as 100% polyester is predominant fibre used for automotive interior textiles. The application of microencapsulated fragrance oil was studied to overcome the low durability issue. The microencapsulated fragrance oil was applied to the finished respective nonwoven fabrics; in combination with chitosan. The treated fabrics were also assessed for their antimicrobial properties and fragrance retention with abrasion.