To ensure and improve the competitiveness of SMEs acting in an environment of distributed engineering and globalisation, four important factors are low cost, short lead-time, improved product performance, and the possibility to adapt products to different costumer specifications. One way of gaining these competitive advantages is to adopt an approach where products are based on prepared design. If some of the work related to these products and design tasks are automated, the design process can become more effective and efficient. This allows for shortened lead-time of product designs, cost estimates (Elgh and Sunnersjö, 2003), more optimised product designs, and customer tailoring, while giving the designers more time for creative problem solving. Companies have to consider the advantages of design automation, its realisation and implementation, as well as its applicability. Other issues of importance are: scope of implementation, how far to push the automation level, procedure for development, identification of information needed, definition of information models (Elgh, 2004), strategy and procedure for handling and storing design process information (Cederfeldt, 2004), selection of suitable application software (Amen et al, 1999), initial cost, maintenance cost, and the use of internal and external expertise. To support companies in choosing appropriate type and level of design automation, there is a need to address the important questions about potential, wishes, requirements, constraints and actual need of design automation. This paper addresses these questions from a SME standpoint. Other issues addressed are the current state of design automation in industry and the companies’ views regarding some important aspects and criteria of design automation characteristics, realisation and implementation.