Thermoplastic olefin (TPO) is the principal material for automotive instrument panels and is prone to fracture especially under heavy airbag deployment, which can prevent the airbag deploying properly. Thus, polyolefin elastomer (POE) was introduced to improve impact properties and fracture resistance. Fundamental methods to characterise TPO with the addition of POE are proposed. The influence of POE content on the mechanical properties was examined. With increasing POE content, the storage modulus and glass transition temperature values decreased, and the damping increased due to the POE increasing the polymer chain mobility. The tensile modulus, ultimate tensile strength and yield stress decreased with increasing POE content, while the ductility of the blends significantly increased. Furthermore, the POE reduced hardness and increased energy absorption during impact. In the fracture analysis, the addition of POE content increased the fracture resistance by increasing the crack energy and decreasing the resistance to crack initiation. Fractographic analysis showed how stretched microfibrils in the blends increase the fracture resistance. These results gave a significant indication of the utility of the elastomer in improving some mechanical properties and impact toughness of the interior automotive material to resist an undesired failure or over-fracture in airbag deployment.