This paper looks into the use of simulation software to develop and maintain diagnostic systems on Car networks. It is done through automatic code generation, while also taking advantage of the Real-time benefits of Simulation software. It will concentrate on the Key Word Protocol (KWP 2000) functioning along a CAN-BUS network as a means to illustrate the benefits of the design of such software. The paper will show the development of such software in its separate areas. Each area complies with the relevant ISO standards of Communication at the various ISO layers. It will also show how this is integrated with the external changeable data, using the SIMULINK Simulation software. This will be linked with Microsoft's Excel spreadsheet, allowing the separation of data from the application. Diagnostic code is then automatically generated. This code can be added automatically to an ECU to give it diagnostic functionality. This diagnostic design is easy to use and adaptable to existing models.