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Computer aided engineering (CAE) has made a revolutionary advance in designing and manufacturing modern products. From the very early stage of conceptual design, through various stages of design process to the final product manufacturing, currently available workstations and appropriate computer software have made considerable contribution in improving product quality, reducing lead cycle time, having a great diversity of products to satisfy customers requirements. One of the most important techniques commonly employed in computer aided engineering is simulation technology which utilises modern computer technology particularly graphical capability to display a wide range of performance of a physical system on a computer screen for system verification and improvement. This paper concentrates on simulation aspects of product design and application and particular attention is paid to the application of simulation technology to mechatronic product design. A novel system simulation platform has been devised for mechatronic product design based on the underlying function block oriented modelling approach which encompasses bond graph theory, block diagram and high level function block representation. A hybrid modelling and simulation method is developed to simulate interdisciplinary mechatronic products, and a library of component function blocks have consequently been created and collected for mechatronics modelling and simulation. A new product design can be verified by easily aggregating a number of high level function blocks into a simulation model and simulating its performance. The generalised model can be further used to optimise system design parameter and achieve design improvements. Two examples illustrating different levels of simulation model of a typical mechatronic product are given.