A very important goal of mechatronics in system development is the integration of mechanical, electronic and software subsystems in order to increase functionality, minimize weight, and reduce production costs. In this work, industry demands on methods and tools for mechatronic vehicle development are addressed from the current product development in industry. The development of a mechatronic car door concept and dynamic stability control are used as examples to identify strong and weak parts of the current processes. Railway vehicle development aspects are also discussed. It is shown that a very important aspect for a successful mechatronic design is co-operation in an interdisciplinary design team. In terms of design methodology, the systematic identification of mechatronic potential based on function analysis is a main issue. Computer tools and technology for concept simulation, co-simulation, managing of models with different complexity as well as model exchange are identified as important demands for future effective development of mechatronic vehicles.