What will come of the watchmaking industry after 2009?

[anton]

As most of you may know, the Swatch group has decided to cease outside distribution of its' ETA movements by 2010. Some may view this as the collapse of some manufacturers, whereas major increases in prices of others. It may also cause other manufacturers to develop their own movements, since they may not be readily available.

But we forgot two more players who may be supplying ebauches to the industry (one already has): Sellita and Eterna. We already know that Sellita is shipping over 600,000 of their SW200's to other manufacturers, but ETA supplies millions upon millions of movements. But what about Eterna? Did you know that they were the ones who designed the original 28xx series? They have been creating new calibre designs as of late.

My question to you is:

What do you think will come of the industry if the supply is shorter than the demand? Will we see prices rise? Manufacturers fall? Newer players in the "ebauche" game?

Will asian watch manufacturers start seeing the boom that was reminiscent of the 70's? Will we know Sea-Gull (Tianjin) as a household name?

And finally, what do you think of ETA's decision to cease selling movements?

As always, I appreciate your opinions and look forward to hearing your responses!

[takashi]

Good food for thoughts... I would guess that there will be more innovation driven towards development of in house movement for established brand name.

It's also highly possible that Sellita will continue to supply movement (it has different grading too, very much like ETA, i.e.: chronometer, etc..). Price increases in well known brand watches are inevitable... It's booming now but hasn't reach the peak yet. The Chinese will be under pressure to reduce pirated watches but it's pretty hard to say the way they handle infringement of copyrights at this moment. Possible Chinese branded watches too, specifically for domestic market.

[Desuetude]

One thing to remember...Swatch will still sell finished ETA movements...just not the ebauches. I personally think that Swatch is shooting itself in the foot. By doing this, they are creating a giant hole in the market that others will be more than happy to fill. Sellita is certainly one that comes to mind. I would hope that Zenith would see this as an opportunity to increase consumption of its' lovely El Premiero. This could also be an opportunity for German watchmakers, such as Union-Glashutte to get more market exposure. The swiss watchmakers might have a more difficult time than others, due to the issue of having "swiss made" on the dial, but I think that others will be just fine. There are so many other companies chomping at the bit to fill ETA's shoes, and are more than capable of collectively doing so. If anything, this reduction in monopolization will possibly help cut down costs in the long run. Without such a heavy hitter having a stranglehold on the industry, it could help us consumers out.

[Dizzy]

They will simply just start building more movements in china. They've already copied the ETA 28xx movement almost perfectly and they new 7750 is apparently not too bad at all. Seagull is already being used in a lot of reps... I think for the consumer, its a bit of a dissapointment though. Im a big ETA fan, but the asian copy movements are getting better and better so i dont think we need to worry too much.

[Corgi]

I have had nothing but stellar experience with Asian movements. My only two dead watches, incredibly, were both ETA!

I definitely think our Chinese friends will make very reliable copies of these movements that will not differ very much from their original counterparts... servicing them, however, outside of China will be impossible...

[Pugwash]

ETA will have transitioned to the Valgranges completely by then and Sellita will pick up the ebauche slack. Non-Swatch companies currently buying completed ETA movements will continue to do so and surpluses will be much harder to get, but not impossible.

Other companies will switch to Sellita or a far-eastern company.

For us, we will have many more Chinese offerings and we'll be happy for the reduced prices, especially when our seconds-at-six has jewels and the 3035 copy kicks ETAs to the kerb.

The last two movements are, of course, merely educated supposition. :-)

[Desuetude]

Do keep in mind the requirements for Swiss watchmakers to keep "Swiss Made" on the dial, and the new legislation that will soon be coming before the EU to change the current requirements of 50% of watch components made and assembled in Switzerland to 80%. That said, like I said above, Sellita will be enjoying picking up the slack, and for the rest of the world, CN will be having a great time picking up some slack, and I'm sure that Japan, and possibly Germany will help with the rest. As far as the reps go, we've had copies of good movements for quite some time; I don't think much is going to change here!

[t]

ETA prices rise up every day...

6 month ago valjoux 7750 factory price was 160euro... today you can sell hundrets of them to China, Russia for 380euro. I have many request.

last week get a email from US watch brand "KOBOLD watch instruments" for asking me of some hundrets ETA 2893-2 movements. They can

[abat]

The run up to 2009 will be interesting as well as what happens afterwards. I suspect we might see ETA movements reps pushed up in price, probably dramatically towards the end. We can probably point at profiteering here but it is also likely to be driven by a rush of buyers wanting to get hold of ETA reps before they become much harder or impossible to get hold of.

[Desuetude]

I don't see why eta REPS would cost more, since producing ETA reps has no bearing on the production of actual ETAs. That said, I've been thinking about buying a Swiss V7750 for the hell of it while I still can...

[Watchmeister]

Somehow I think the watch industry will survive. The Chinese already make a tourbillon which is more reliable than the Swiss one. On the gen side what has come out of it so far is that many of the watch names have moved to more in-house movements or other alternatives. I think that is good for the gens. Look at Panerai and its latest offerings. They have added several in-house movements (or derivations of a new base movement). I hope it will lead to more innovation in the mid and lower priced gens. It seemed like too many chronos have the standard 7750 configuration because they were always plentiful and less expensive.

On the rep side obviously ETA/Swiss reps will climb in value and the number of new offerings will shrink. And yes I picked up a bunch of older 7750's as back-up. But we are already seeing many different offerings including big dates, new sub-dial configurations. The rep industry has moved on because they have too. So treasure your ETA reps but the day that Breitling, Panerai, IWC and other popular repped gens move onto other movements is the day ETA becomes an Edsel. Maybe we won't have to live with misplaced sub-dials on a Daytona or AP ROO.

[t]

@kruzer

yes Panerai has now in-house movements... this movements are very faulty and cost 3-4 times more as ETA models

so i think... it is very sad that brands going for in-house movements... gens are very expensive now and will go more expensive with in-house movements.

[Watchmeister]

Well Panerai will either get it right or not sell any watches. And yes, it would be easier if ETA kept readily supplying movements and parts to anybody. But they are not. But I have confidence that others will step up to the plate. They always do. And one day all these "Swiss Watch" companies will wake up and find themselves at the bottom of the pile. Did you ever think Hyundai would have far better quality ratings than Mercedes Benz.

[Pugwash]

so i think... it is very sad that brands going for in-house movements... gens are very expensive now and will go more expensive with in-house movements.

This is very good for the genuine market. Sure it hurts us rephounds, but it's good for the overall watch market.

[t]

This is very good for the genuine market. Sure it hurts us rephounds, but it's good for the overall watch market.

@Pug

it is good for the brands... but bad for customers and collectors.

[RWG Technical]

On the watchmaking/repair side of the question, I have spoken at length to my supplier about this very question. The answer has been that there is nothing at all to worry about, parts and ETA movements will always be available.

I can still order and get any ETA movement I like, and parts has never been an issue.

The Sellita movement, while a good quality one, doesn't share one part with the ETA, so using it as a spares source is not a possibility.

Our reps have always used surplus movements, so no change there...

RG