This thesis deals with multibody dynamic simulation of mechanical systems in the product development process. The approach is to make the process of multibody dynamics simulation more efficient by structuring of the simulation, simulation models and their usage. Previous work has concentrated on developing faster calculation methods and more specialised simulation software. Efforts have been made to clarify how computer tools and multibody dynamic analysis methods are used in product development in industry today. Insight into the knowledge domains of product development and multibody dynamics is given together with an introduction to the area of distributed simulation, modularisation techniques and nonlinear analysis. The mentioned domains have traditionally been separated but the introduction of concurrent engineering and faster computers puts new demands on the need for integration of computer support and analysis in the development process. The performed work is to be seen as cross-functional work in order to bring different domains together for the sake of a better total product development. The applications areas used in the work are all within vehicle system dynamics. A proposal for performing the multibody dynamics methodology in a distributed and modular way in the product development process is given based on the performed work together with a prototype implementation.