In this article we are going to list the 15 biggest manufacturing companies in the world. Click to skip ahead and jump to the 5 biggest manufacturing companies in the world. The manufacturing sector is perhaps the single most important sector in the world, and contributes around 16% to the global GDP. It includes many major industries and is responsible for the provision of most of the luxuries we are used to in our lives. In fact, you can say that if it wasn’t for the manufacturing industry and its constant innovation, growth and improvements, we wouldn’t be enjoying the standards of living that we are today.
You can see the strength and importance of the manufacturing sector if you just take a look at the importance governments places on the sector and how policies are devised to encourage the sector and the industries within. Economies of most countries, and especially of developing economies are vastly dependent on manufacturing, which tends to have some of the biggest companies. Among the many initiatives that countries take to encourage manufacturing include Made in India and Made in China 2025, where the countries encourage local manufacturing to transform the economy and raise the strength and stature of the country.
The Made in India initiative came into being in 2015 and the reason behind the idea was to reduce the dependency of the biggest democracy in the world on imports and instead, producing goods in their own country. The initiative has had a significant impact already on Foreign Direct Investment, which was worth $286 billion from 2014 to 2019. This means that it comprises nearly 47% of the overall FDI India has received since 2000.
As the world has progressed and developed, reliance has also started to grown on the service sector rather than the manufacturing sector. This has led to an imbalance and this is especially true for more developed economies in the West. This is why now many policy makers are leading the argument that a rebalance is required especially since manufacturing is seen as being able to provide greater as well as more sustainable growth. However, the manufacturing sector does have several issues which include currency volatility, trade wars between the two superpowers in the world in China and the US, a lending shortage, downward pressure on price and sustainability of supply chains, which has been further devastated by the Covid-19 pandemic, which I’ll get to later on. But perhaps the biggest issue the West faces is that developed economies have a lot more rules, regulations and most important of all, taxes. This why some of the biggest companies in the world would much rather have their manufacturing units in the East, with China and India being preferred destinations as labor is cheap, taxes are avoided and lax rules and regulations mean that these companies can get away with a lot more.
Manufacturing in the emerging markets has focused more on high volumes and lower prices, which is why the top three countries in the Global Competitiveness Index are all Asian, while the G7 countries have continued falling down the list. And since technology is the most important tool anyone can have in this time and age, innovation and the use of this technology is what separates the biggest manufacturing companies in the world from the rest of the competition.
However, the manufacturing industry did take a massive hit when the Covid-19 pandemic hit. The global supply chain was devastated as I mentioned earlier, and global lockdowns were imposed which led to manufacturing sites across the world being closed, apart from those required for essential activities. While manufacturing resumed once the lockdown ended, now that the second wave has been gripping the world once more, lockdowns are again being imposed and uncertainty is reigning supreme. The fact is, we will only know the proper impact on the manufacturing sector some time in 2021, and hope that normality resumes soon now that vaccines are being rolled out.
The biggest manufacturing companies in the world belong to several different industries, and are often counted among the biggest companies in the world, regardless of sector or industry. The combined revenue of these companies is more than $2.6 trillion, while the profits exceeded $150 billion as well as nearly $3.7 trillion in assets. This is more than what most countries in the world own. Since manufacturing is a labor intensive business (though automation is on the cards now), these 15 companies also provide employment to more than 4 million people directly and millions more indirectly. 8 of the 15 companies in our list are some of the biggest automobile companies in the world which can often be as big as major cities. So let’s take a look at some global manufacturing giants, with the data having been taken from Fortune Global 500 in 2020, starting with number 15:
15. Cardinal Health (NYSE:CAH)
Total revenue of the company in 2019 (in billions of dollars): 145,534
Total profit of the company in 2019 (in billions of dollars): 1,363
Total assets of the company in 2019 (in billions of dollars): 40,963
Total employees of the company in 2019: 49,500
One of the biggest healthcare companies in the world is Cardinal Health, which manufactures and distributes medical products as well as pharmaceuticals.