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Watchmaking Industry

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Watchmaking Labels and Certifications

Watch Manufactures

Watchmaking Groups

Watch Brands

Swiss Watchmaking

Japanese Watchmaking

German Watchmaking

French Watchmaking

Is there a “watchmaking industry” as such? Or should one only speak of the “horology sector,” as one would say the “technology sector”? Everything depends, in reality, on which point of view one adopts—and above all from which country one is looking. For there is a watchmaking industry only when a large number of companies, manufactures, and organizations linked to the design and production of watches exist, as is the case, of course, in Switzerland, but also in France. Let us examine the workings of this industry in this guide to watchmaking.

The Multiple Facets of the Watchmaking Industry

In reality, there is not one watchmaking industry, but several. Over time, and in the wake of the transformations that affected it after the great quartz crisis of the 1970s and 1980s, the horology sector has reorganized itself around two major industries:
  • Watches intended for the mass market, which represent approximately 90% of total production (roughly 1.2 billion units produced worldwide each year). These models are predominantly 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, assembled in an artisanal manner, in companies or manufactures that may be independent or belong to large watchmaking groups. The high-end watchmaking industry comes predominantly from Switzerland, its birthplace; but also from France, Germany, and Japan. Here we are speaking of timepieces sold for anywhere between several hundred and several thousand, or even tens of thousands of euros.
It must be acknowledged that the Swiss watchmaking industry operates primarily in the luxury and high-end domain: the most expensive (and most sought-after) watch brands are almost all based in this small country. The worldwide reputation acquired by Swiss mechanisms is so significant (and so profitable) that the competent authorities have established a “Swiss made” label from which companies that produce their timepieces within its borders may benefit. Visit the website of the Federation of the Swiss Watch Industry to learn more. Nevertheless, since the bulk of production is mass-market, most watches produced by the watchmaking industry come from Asian countries. Even timepieces bearing the “Swiss made” designation regularly source components from Chinese or Japanese workshops (which have acquired an excellent reputation in terms of movement quality).

The Watchmaking Industry and Its Actors

Overall, the watchmaking industry is divided among several actors:
  • Watchmaking groups (which own several brands, such as Swatch Group);
  • Assemblers (which do not produce their own movements, but supply a finished, cased product);
  • Manufactures (which adopt vertically integrated production and take charge of a maximum number of tasks ranging from component design to casing: for example Vacheron Constantin or Longines in Switzerland, but also Seiko in Japan);
  • Subcontractors (which supply parts to assemblers and manufactures);
  • Brands (emanations of groups, companies, and manufactures);
  • Retailers (from whom consumers purchase models);
  • Federations (which ensure compliance with and application of watchmaking industry rules, such as the FHS);
  • Regulatory bodies (which issue certifications, such as the Official Swiss Chronometer Testing Institute, or COSC).

The Horology Sector and Its Economy

The horology sector is in excellent health—and generates several billion euros per year, although these indicators have tended to decline in recent years. In 2012, the global watchmaking industry turned over, on its dials, some 40 billion euros, and provided work for several hundred thousand people across the planet. Despite a workforce in slight decline, particularly in the Swiss market, and sales figures that are falling (due to overall economic uncertainty), the watchmaking industry remains a significant financial resource and an essential market. The impact of the watchmaking industry on national economies varies greatly depending on the country. It is obviously critical for Switzerland, the birthplace of modern watchmaking and the epicenter of the high-end segment worldwide: in 2012 and 2013, watch exports amounted to 21 billion Swiss francs (19.5 billion euros), or 10.5 billion per year. This amount has admittedly declined—9.4 billion Swiss francs in 2016 (8.8 billion euros)—but it remains high, and is predominantly driven by Asian countries (source: Deloitte 2016 study). To a lesser extent, the weight of the watchmaking industry is also significant in France, Germany, China, and Japan. Each country has its own “watchmaking industry,” with its own specificities!