There is a growing academic and industrial interest in how firms can adopt agile project management to meet the demands of dynamically fast-moving environments. However, organizations face difficulties using agile methods in developing a physical product, like the companies found in the automotive industry. This article aims to study agile project management from the perspective of dynamic capabilities. It presents a strengthened analysis of the adoption of agile methods needed for developing physical products in the automotive industry. To address this issue, we formulated the following research question: “what are the dynamic capabilities associated with the agile project management of product development in the automotive sector?”. The article presents a case study of a multinational organization in the automotive sector that implemented concepts and practices of agile methods in the project management of new vehicles. Results evidenced the manifestation of dynamic capabilities in the organization's agile project management scope at sensing, seizing, and reconfiguring levels. Furthermore, findings showed the presence of agile methods in the projects and their implications for the organization regarding benefits (like communication, time, effectiveness, autonomy, and motivation gains) and challenges (like resistance to organizational changes). Finally, we propose a framework for analyzing relationships between dynamic capabilities’ microfoundations and agile project management practices to guide the choice and implementation of agile methods in the automotive sector.