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A new system reliability allocation methodology was applied on a steering product. The methodology makes use of design failure modes and effects analysis (DFMEA) and allows the allocation percentages to reflect differences in the criticality levels of the subsystems or components. The methodology was applied in conjunction with system reliability target setting. The paper first explores existing reliability allocation methods. It then introduces the new methodology. Finally, a real-life case is presented to show how the methodology was adopted and how and why it was modified. The approach presented here is one more way to make full use of the analytical efforts that have gone into the DFMEA.