Why Catena-X is becoming critical to automotive production

If global vehicle production is a body of work - and each production facility a cell, then data, it follows, is akin to the neurotransmitters that connect the entire corpus. And according to the European Automobile Manufacturers' Association (ACEA), there were 255 automobile assembly, engine, and battery production plants in Europe alone from last year's accounting, with 98 specifically dedicated to car production.

For powerful cellular operation, however, the nervous system of a body requires pervasive, holistic connectivity. More data, more connectivity. Catena-X represents that closely interconnected nervous system. But what is Catena-X? For accuracy, it is not a ‘platform’, a ‘database’, or just another piece of ‘software’. Catena-X is a federated data ecosystem that allows automotive manufacturers, suppliers and partners to exchange information securely whilst retaining complete control over their own data. And the impact on automotive manufacturing is nothing less then transformative.

BMW alone, established more than 100 digital connections to automotive suppliers via Catena-X by the end of 2024, and according to plattformindustrie40, “A failure of Catena-X today would lead to production downtimes and serious compliance problems, as operations rely on the data ecosystem.” These BMW suppliers include Magna, Dräxlmaier, BASF and Bosch. But there are many more. 

What vehicle producers need to understand is that Catena-X is not the cloud computing hype of previous decades, nor is it another marginal pilot project destined to fade after initial enthusiasm. For automotive production, the system represents something altogether different. Born from pandemic-era supply chain chaos and accelerated by tightening environmental regulations, the initiative has evolved from a German-funded concept that began in 2020, to what SAP recognises as a fully operational data ecosystem with approximately 190 members globally.

And both the membership and the trajectory has been growing swiftly. Ford included Catena-X in supplier contract terms from July 2024, and BMW, naturally, has the system deeply embedded, so that what began as voluntary collaboration has become an operational necessity. The architecture underpinning this growth however, extends well beyond logistics coordination. The consequences for vehicle production are vast. Within factory walls, Catena-X is introducing capabilities that directly alter how production teams monitor quality, trace components and optimise overall equipment performance, reforming and enhancing vehicle production both now and in the near future.

Catena-X’s federated architecture of sovereign data exchange

At its foundation, Catena-X operates through Eclipse Dataspace Components, (EDCs) - standardised connectors that enable different software systems to communicate without extensive bilateral integration. Put simply, it allows a supplier's manufacturing execution system, for example, to interface with an OEM's quality management platform through these connectors, while maintaining data sovereignty throughout.

This is where the system diverges from the body-cell-nervous system metaphor we began with - as automotive factories retain full control over their data, deciding precisely what to share, with whom and for how long. 

Oliver Ganser, Vice President for Digitalisation of the Purchasing and Supplier Network at BMW and Chairman of the Catena-X board, likens the system to email protocols. Just as Gmail users can message Outlook users seamlessly, SAP systems can now communicate with IBM platforms using standardised data models and secure interfaces. The analogy is apt. Email succeeded not because one provider dominated, but because open protocols enabled ubiquitous interoperability. This is what Catena-X is now achieving for automotive production.

The system also enhances smart factory principles on an international scale, with digital twins forming a cluster at the operational core. These virtual representations of physical assets enable real-time tracing of every component from raw material input to final assembly. Bosch's Digital Twin Registry, for example - the first to receive official Catena-X certification - allows these twins to be created and managed in a decentralised manner. With this, production staff are able to gain immediate insight into component origin and status; critical for managing safety-relevant parts as well as ensuring regulatory compliance.

As the monolithic tide of once-coveted digital data lakes ebbs away, Catena-X’s distinct operational approach matters considerably. BMW, for example, explicitly rejected a cross-company central data repository since various production challenges - particularly those regarding product sustainability - can only be solved on a cross-company basis, yet a centralised approach has the fundamental drawback of undermining data sovereignty. The federated architecture of Catena-X resolves this tension by enabling collaboration without centralisation.

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Quality management transformed by data transparency

The operational impact of Catena-X is perhaps most clearly illustrated through its sweeping effect on quality assurance. German car manufacturers alone set aside reserves of €1.4 billion to €1.8 billion ($1.5 billion to $1.9 billion) annually for recalls, according to SAP. The major bottleneck stems from the fact that traditional approaches rely on labour-intensive, parts-based inspections with anomalies often detected only after failures have occurred.

Through Catena-X, however, field data from OEMs synthesises with production data from suppliers, enabling early-warning analyses based on standardised information flows. As a case in point: BMW's collaboration with Bosch on particle sensors and steering components identifies patterns and anomalies up to four months earlier than conventional methods, frequently before faults manifest.

Naturally, these precision gains translate directly over to cost reduction. One particular recall action initially showed that 1.4 million vehicles were affected. After exchanging field and production data through Catena-X however, it was revealed that only 14 vehicles actually required recall. This represents a huge cost-saving. This was achieved through analysis comparing OEM field data with supplier production records which pinpointed the affected units with unprecedented accuracy.

Hagen Heubach, then-global vice president and head of Discrete Industries at SAP, clearly notes that this allows pinpointing exactly which vehicles face problems, leading to substantial cost savings. And for suppliers particularly, the benefits extend far beyond avoiding recall costs. Dräxlmaier, which supplies high-voltage battery systems, established data flow systems where every component's digital twin registers on Catena-X, ensuring traceability across the entire production chain.

The tier-supplier now registers 20,000 to 40,000 digital twins monthly, conducts 100 daily data exchanges in near real-time - taking just two to three minutes per transaction - and guarantees product delivery only after successful data verification by customers.

Magna, currently scaling and implementing Catena-X across its operations, has also publicly emphasised the value of harmonised standards. The goal involves moving away from point-to-point connections towards standardised interfaces, reducing integration complexity as the supplier network expands.

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Production carbon footprints calculated with primary data

The rising urgency of sustainability reporting requirements are driving the development and rollout of yet another critical Catena-X manufacturing application. Within plants, Catena-X enables the calculation of Product Carbon Footprints (CPF) by using the manufacturer’s primary data rather than relying on industry averages. BMW's implementation of the system at Plant Landshut has measured data-based energy consumption in the production of whole components for the first time.

The kidney grille on the BMW iX serves as a working example of this data-powered sustainability reporting. PCF calculation follows the Catena-X rulebook, covering all grade-to-gate emissions from raw material extraction through supply chain emissions to manufacturing processes at production facilities. Partners to this project use Catena-X-certified CO₂ applications from Siemens, enabling data exchange between Plant Landshut and high-performance plastics supplier Covestro.

Sabrina Schrangl, Project Lead for Catena-X at BMW Group Component Manufacturing, further emphasises that together with partners, the OEM uses the Catena-X data ecosystem to calculate CPFs of components as they are being manufactured. It is this real-time capability which allows production managers to monitor energy use and optimise processes for lower emissions based on actual operational data rather than estimates.

BASF, ranked among the top 30 global automotive suppliers, sees standardised PCF calculation as central to Catena-X's value. Uniform standards and formats matter because the calculation occurs without lock-in effects. Andreas Wollny, Project Lead for Catena-X at BASF, notes sustainability is establishing itself as an additional factor for customers alongside quality and quantity. Corresponding protocols and transparency increase customers' willingness to pay. He points out that since one of Catena-X’s core objectives is to provide a globally applicable data exchange system, “the impact of regulatory developments demonstrates the importance of an internationally viable solution."

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OEM Ford, and suppliers, Flex (tier 1), and Micron (tier 2), demonstrated intercontinental PCF data exchange across the value chain back in 2024, through which all partners gained access to verified, primary PCF data, allowing more precise carbon footprint calculations. For the first time, OEMs, Tier 1 and Tier 2 suppliers exchanged PCF data seamlessly along the value chain, reducing costs, increasing transparency and supporting scalable decarbonisation.

Manufacturing-as-a-Service reconfigures production capacity

Beyond quality and sustainability, Catena-X supports Manufacturing-as-a-Service (MaaS), enabling production steps or capabilities to be offered and consumed across the network. This concept allows factories to quickly find alternative manufacturing capacity from partners to mitigate internal bottlenecks or material shortages - a significant disruption to automotive production, especially over the past few years which have been marked by incessant disruption.

Fraunhofer IOSB, which played a major role in designing production-related topics within Catena-X, developed the Smart Factory Web reference architecture specifically for MaaS. The architecture enables the matching of required and available manufacturing capabilities, tools and material inventories, helping manufacturers quickly find alternative suppliers.

According to Siemens’ “Senseye Predictive Maintenance: The True Cost of Downtime” report, large factories lose more than 320 production hours annually on average due to delayed deliveries, equipment failures or short-term order changes - with outages resulting in more than $2m losses per hour in automotive manufacturing.

Catena-X's modular production application enables automated, self-organised manufacturing processes that query the data ecosystem when deviations occur. Solving issues such as, ‘Which machine can perform the job instead?’, ‘Who can deliver material at short notice?’, or ‘Which orders can be brought forward to avoid idle time?’ - with queries, comparisons and evaluations occurring automatically.

These ramifications reach into small and medium-sized enterprises, which often lack the resources to bridge delays and depend heavily on repeat orders from satisfied customers. By networking production with potential business partners through Catena-X, automated and rapid reconciliation of data along the production and supply chain becomes feasible, with early identification of action requirements and improved overall equipment effectiveness.

Predictive maintenance through connected machinery data

Beyond these, numerous production improvements emerge by integrating hardware and software data for smarter optimisation. Within the ecosystem, machinery insights blend with AI and analytics to anticipate equipment breakdowns preemptively.

This minimises unexpected halts on the assembly line, boosting Overall Equipment Effectiveness and ramping up throughput. Ultimately, it marks an important leap from reactive fixes to proactive strategies rooted in real-world operations. In Catena-X's real-time control and simulation scenarios, teams craft AI-driven forecasting algorithms enhanced by simulations, complete with intuitive visualisations and mobile access. Leveraging distributed machine learning - particularly federated approaches - unlocks deeper data complexity to pinpoint key production and logistics metrics, while safeguarding sensitive information without centralising it.

All the while, condition monitoring enables proactive maintenance instead of reactive repairs, reducing production costs and downtime whilst opening new digital service revenues for machine manufacturers from their installed base. This transforms the economics of equipment operation across the value chain.

Global expansion of Catena-X and the challenges of standardisation

Although initially a European project, Catena-X's reach now extends far beyond the region. The Automotive Industry Action Group - a non-profit that operates to increase collaboration in the automotive sector - serves as the North American hub, with Catena-X now being rolled out to its nearly 5,000 member companies. In China, the network collaborates with the China Association of Automobile Manufacturers and the German Association of the Automotive Industry. Regional hubs have also been established in France with GALIA, as well as in Sweden and Spain.

Kevin Piotrowski, Chief Transformation Officer at AIAG, explains that members want to collaborate and share data but prefer avoiding five or ten different methods. Catena-X addresses the frustration of chasing data across 15 different formats or receiving thousands of assessments as a supplier. Whilst simple Electronic Data Interchange remains valuable for point-to-point transactions, Catena-X addresses broader visibility needs for complex data throughout entire supply chains without necessarily storing it.

The Readiness Booster Program, launched in June 2025, provides structured, modular paths to help companies become Catena-X Ready with clear guidance, onboarding support and certification. Hanno Focken, Managing Director of the Catena-X Automotive Network, notes positive resonance from committed OEMs and programme partners ready to scale, including Volkswagen Group, Mercedes-Benz, BMW, Ford and BASF, alongside suppliers and solution providers.

Initial resistance from some suppliers viewing Catena-X as another system to manage has diminished as benefits become more evident over time. Enhanced collaboration, improved efficiencies, robust data security and integrity, data sovereignty and fostered innovation represent attributes absent from data sharing a decade ago.

Factory-X extends concepts to mechanical engineering

The success of Catena-X spawned Factory-X, extending proven concepts to mechanical engineering and bringing vertical integration down to the shop floor. Whilst Catena-X viewed the factory as a single block, Factory-X centres on the shop floor where machines with their own suppliers and maintenance requirements are located.

Nadine Kanja, solution head for SAP Industry Network Automotive and Catena-X, explains that the goal involves extending supply chain flexibility to the manufacturing area. When technical problems arise or customer needs change, manufacturers must pivot quickly. However, factories lack inherent flexibility, with machines permanently installed and hardwired, and rebuilding requiring enormous effort on the manufacturer’s part.

Factory-X brings flexibility directly into manufacturing through modular production, MaaS, and on-demand manufacturing. SAP co-leads Factory-X with Siemens, coordinating 47 consortium members as we speak. Georg Kube, head of Industry Data Ecosystems at SAP, notes that Europe's great asset compared to America and Asia involves historical knowledge of how good processes and products actually work. Factory-X aims to maintain quality whilst simultaneously reducing costs and increasing flexibility.

This dual-speed strategy enables companies active in automotive (as well as industrial manufacturing) sectors to expand systems flexibly as requirements grow. Factory-X has been designed as a development project until mid-2026, when it will transition into its stable operational phase.

The operational reality emerging through the Catena-X ecosystem

Since April 2025, Catena-X registration has become integral to BMW's procurement process. Digital lock notifications in the network allow suppliers to report critical components efficiently, preventing costly rework. Information exchanges occur more quickly, errors minimise through targeted updates and supply chain resilience strengthens.

Schaeffler, working with BMW and SAP, leverages existing SAP Analytics Cloud and SAP Datasphere installations to implement Catena-X quality management use cases immediately. The integration with established enterprise systems reduces implementation barriers for large suppliers already using these platforms.

The shift from vision to networked reality occurred in just a few years. What was conceptualised in 2020 and launched in 2021 amid pandemic disruptions and semiconductor shortages, now forms a key part of the automotive industry's digital transformation. The benefits prove measurable: Errors detected four months in advance. Recall scopes reduced from 1.4 million to 14 vehicles. Cost savings in low single-digit millions. Production continuity maintained through data-driven decisions.

Historically, connecting production hubs into a holistic system has presented many challenges. The onboarding of partners requires the establishment of data maturity. Small and medium-sized enterprises may lack IT infrastructure and specialists to participate fully, while standardisation remains complex in its own right, with proprietary systems and individual data formats hindering production and supply chain-wide networking.

Catena-X addresses these barriers through simplified connection methods regardless of company size or digitalisation state, alongside training, support and certification programmes. The ecosystem deliberately empowers existing players and solution providers rather than imposing new technical mandates.

It is no surprise that the automotive industry finds itself confronting volatile demand, supplier bottlenecks and transparency gaps across production value chains. And the insufficient traceability across parts, materials and production steps makes root cause analysis more difficult when disruptions occur. In order to build resilient production networks, vehicle manufacturers require continuous digital information flow that is secure, standardised and interoperable.

Catena-X provides this foundation - not through revolutionary technology - but through practical application of standardised data models and sovereign data exchange principles. And the ecosystem rewards participants with above-average resilience, innovative strength and earnings potential.

As Oliver Ganser has noted, the radical new collaboration approach embodied by Catena-X improves value creation processes within sustainability, supply security and quality contexts whilst simultaneously reducing costs.

The more national and international companies join, the greater the added value for all those involved. From vision to networked reality, Catena-X demonstrates how open standards and sovereign data exchange can transform automotive manufacturing without centralisation or loss of competitive advantage. Within factory walls and across global production, the architecture is already operational - and fast becoming ubiquitous.