Is there a “watch industry” to speak of? Or should we just mention the “watch industry”, as it looks like the “new technologies sector”? It all depends, in fact, from what point of view we place – and especially from what country we look. Because there is a watch industry only when there are a large number of companies, factories and organizations involved in the design and manufacture of watches, as is the case, well sure, in Switzerland, but also in France. Let’s see what the wheels of this industry are in this watchmaking guide.

The many facets of the watch industry

In reality, there is not a watch industry, but several. Over time, and thanks to the transformations that affected it after the great crisis of quartz in the 70s and 80s, the watchmaking sector was recomposed around two major industries:

Mass market watches, which account for about 90% of total production (about 1.2 billion units produced worldwide each year). These models are mainly manufactured in Asian countries, on low-cost production lines. They are sold to the public for sums ranging from a few euros to several hundred euros.
Watches manufactured for the high-end and luxury market: mechanical models, mounted in an artisanal way, in companies or factories that can be independent or belong to large watchmaking groups. The high-end watch industry comes mainly from Switzerland, its cradle; but also from France, Germany and Japan. We are talking here about timepieces sold between a few hundred and several thousand, even tens of thousands of euros.

It is clear that the Swiss watch industry operates mainly in the luxury and high-end sectors: the most expensive (and most popular) watch brands are almost all based in this small country. The worldwide reputation gained by the Swiss mechanisms is so important (and so profitable) that the competent authorities have put in place a “Swiss made” label which can benefit the companies that produce their timepieces within its borders. Visit the Federation of the Swiss Watch Industry website for more information.

Nevertheless, most of the production being mass, most watches produced by the watch industry come from Asian countries. Even timepieces stamped “Swiss made” are regularly supplied in parts by Chinese or Japanese workshops (which have acquired, in terms of movement quality, an excellent reputation).

The watch industry and its actors

Overall, the watch industry is divided between several actors:

 

  • Watch groups (which own several brands, such as Swatch Group);
  • The nipples (which do not produce their own movements, but provide a finished, nested product);
  • Manufactures (which adopt a verticalized production and support a maximum of tasks from the design of the parts to the casing: for example Vacheron Constantin or Longines in Switzerland, but also Seiko in Japan);
  • Subcontractors (who supply parts to connectors and manufactures);
  • Brands (emanations of groups, companies and manufactures);
  • Resellers (where consumers buy models);
  • Federations (which ensure the respect and application of the rules of the watch industry, such as the FHS);
  • Control bodies (which issue certifications, such as the Swiss Official Chronometer Testing Authority, or COSC).

The watch industry and its economy

The watch industry is in excellent health – and is brewing several billion euros a year, although these indicators have tended to decline in recent years. In 2012, the world watch industry was turning some 40 billion euros on its dials, and was giving work to hundreds of thousands of people on the planet. Despite a slight decline in the number of employees, particularly in the Swiss market, and declining sales figures (due to the global economic uncertainty), the watch industry remains an important financial windfall and a key market.

The impact of the watch industry on national economies varies greatly by country. It is obviously crucial for Switzerland, cradle of modern watchmaking and epicenter of the high-end segment in the world: in 2012 and 2013, watch exports amounted to 21 billion Swiss francs (19.5 billion euros) ), or $ 10.5 billion a year. This amount has certainly decreased – 9.4 billion Swiss francs in 2016 (8.8 billion euros) – but it remains high, and mainly pulled by the Asian countries (source: Deloitte study 2016).

To a lesser extent, the weight of the watch industry is also important in France, Germany, China and Japan. Each country has its own “watchmaking industry”, with its specificities!