This paper attempts to investigate effect of integrating new petrol engine in an existing compact car engine bay on tailpipe noise. Due to lower noise emission expectations nowadays, it was necessary to analyze the new routing of exhaust system from flow and noise point of view. It was proposed to test benchmark vehicle for back pressure and Sound Pressure Levels (SPL) according to standard test procedures to set targets for these two parameters. The new exhaust system was developed based on packaging and structural constraints in engine bay and underbody and subsequent CFD and acoustic models were analyzed using 3D CFD and 1D acoustic simulation. Commercially available software like Fluent and GT-Power were used along with DOE studies for optimizing the design.3D CFD was used for predicting pressure drop for various concepts. The design was matured based on packaging, manufacturing constraints and initial pressure drop (or back pressure). 1D CFD code was then used for predicting system level pressure drop and SPL. Use of Design of Experiment (DOE) technique was proved to be very useful to achieve target SPL and back pressure levels.Finally exhaust system was recommended based on above optimization study and tested on engineering prototype. Thus the numerical model was validated and observed to be in good agreement with test data. The recommended design was found to be satisfactory in terms of set targets.