The increasingly competitive nature of the automotive industry is forcing engine design organizations to target improvements in function and quality at the same time as substantial reductions, in product development cycle times. This paper describes how Ricardo is meeting this challenge through the integrated development and application of computer aided engineering (CAE) methods. The weaknesses of traditional approaches to the management of CAE innovation are discussed and the need for a more strategic approach is identified. Examples are given of CAE research, development and applications carried out by Ricardo. Conclusions are presented outlining the key elements of an effective CAE strategy.