ETA stopping production in 2010

[stang]

I read on Timezone or somewhere else that ETA (supplier of 80% of the movements and ebauches' (sp?) from Switzerland) is planning to cease production and supply of its movements by 2010. Apparently, they wanted to stop supply earlier but some watch governing board forbade them from doing so prior to 2010. This, supposedly, will give other companies time to develop and "tool-up" for production of new movements to replace this void. Even sourcing of the hairsprings for the balances has become a major issue. Like the ETA movements, there is a monopoly on hairspring supply, with basically only one company (nivaflex?) producing them. Rolex now makes their own hairsprings but they are the exception.

Since there have been more and more reps containing ETA or other Swiss (Lemania) movements recently (a very good trend in my opinion), I wonder how this transition will affect the replica market in the next few years. I'm guessing that availability will decrease with a cuncurrent increase in price for ETA based reps. Not good. Also, while the influx of new movements will probably create a greater diversity in the genuine sector, this will probably make it more difficult to have desired replicas made.

Consider how many watches there are based on the 7750 platform. Currently, all a rep maker has to do is source an ETA or Asia 7750 and there are dozens of possible watches to clone using this engine. Now consider a chrono market with dozens of different movements. Different subdial layouts, different features, displays, etc. It will be almost impossible to buy one movement and have it used for many different watches.

What watches will a rep maker choose to copy? How accurate will they be able to make the watches? How much will the price for a particular rep increase considering the larger investment and risk associated with specific needs for each watch? What movements will the Asian's choose to copy?

I would like to hear peoples thoughts on this issue. I don't see this as being good for the replica market but maybe I'm missing something.

Regards,

Jeff

[z3k0]

I read on Timezone or somewhere else that ETA (supplier of 80% of the movements and ebauches' (sp?) from Switzerland) is planning to cease production and supply of its movements by 2010. Apparently, they wanted to stop supply earlier but some watch governing board forbade them from doing so prior to 2010. This, supposedly, will give other companies time to develop and "tool-up" for production of new movements to replace this void. Even sourcing of the hairsprings for the balances has become a major issue. Like the ETA movements, there is a monopoly on hairspring supply, with basically only one company (nivaflex?) producing them. Rolex now makes their own hairsprings but they are the exception.

Since there have been more and more reps containing ETA or other Swiss (Lemania) movements recently (a very good trend in my opinion), I wonder how this transition will affect the replica market in the next few years. I'm guessing that availability will decrease with a cuncurrent increase in price for ETA based reps. Not good. Also, while the influx of new movements will probably create a greater diversity in the genuine sector, this will probably make it more difficult to have desired replicas made.

Consider how many watches there are based on the 7750 platform. Currently, all a rep maker has to do is source an ETA or Asia 7750 and there are dozens of possible watches to clone using this engine. Now consider a chrono market with dozens of different movements. Different subdial layouts, different features, displays, etc. It will be almost impossible to buy one movement and have it used for many different watches.

What watches will a rep maker choose to copy? How accurate will they be able to make the watches? How much will the price for a particular rep increase considering the larger investment and risk associated with specific needs for each watch? What movements will the Asian's choose to copy?

I would like to hear peoples thoughts on this issue. I don't see this as being good for the replica market but maybe I'm missing something.

Regards,

Jeff

If you use search function you can probably find bunch of topics on this subject. So just quick recap - ETA will not stop production by no means, neither it will stop selling movements. It will stop selling ebauches (half finished movements) to companies that used to buy them, finish/decorate movement and sell it for substantially larger amount of money - and of course make nice profit out of that. In todays world of stock markets and profit hunting shareholders, every cent of profit counts - and of course someone in Swatch group realized ETA could take this profit by finishing its own movements in-house. And there you have it - just plain old huger for profit

And, you don't have to worry there will be too much new movements appearing in large-production mechanical watches - again, simple economy - it would cost too much, and decrease profit. And since most of brands that target mass-market are owned by large multi-national conglomerates, anything that would reduce their profit is not very likely to happen.

regards

[Watchmeister]

As already mentioned this issue has been well covered. Beyond the production issue it appears that there is already an increasing lack of availability of ETA's at reasonable prices to the Chinese rep manufacturers. ETA reps are now rarer although certainly available and in the case of a number of reps that use them their prices have risen accordingly. On the manufacturer side we are already seeing many new movements and layouts as manufacturers continue to expand their offerings beyond Rolexes and Eta based gens. So I don't think it slows anything down. ETA's are still readily available but not at prices that work for the rep makers.

[PAMman]

There is no doubt that the supply of ETA movements will be more restricted and costly than was previously the case and this will enevitably lead to other companies offering alternatives.

However, I struggle to understand what logic that lies behind the Asian company, which manufactures the 28,800 7750 clone, producing a good quality viable alternative to one of the most popular chrono movements, yet altering the hand size to prevent it being a straight swap. Setting aside the obvious aggravation for us upgrading from Asian to Swiss this needless alteration means that a watch repair shop cannot easily replace a faulty Swiss 7750 with the Asian version as an alternative to costly repairs / service and mainsteam manufacturers cannot easily switch to using the Asian movement. Presumably the Swiss companies which use the ETA ebauche could equally use an Asain ebauche and retain their 'Swiss Made' status due to the relative low value of the imported component.

[z3k0]

There is no doubt that the supply of ETA movements will be more restricted and costly than was previously the case and this will enevitably lead to other companies offering alternatives.

However, I struggle to understand what logic that lies behind the Asian company, which manufactures the 28,800 7750 clone, producing a good quality viable alternative to one of the most popular chrono movements, yet altering the hand size to prevent it being a straight swap. Setting aside the obvious aggravation for us upgrading from Asian to Swiss this needless alteration means that a watch repair shop cannot easily replace a faulty Swiss 7750 with the Asian version as an alternative to costly repairs / service and mainsteam manufacturers cannot easily switch to using the Asian movement. Presumably the Swiss companies which use the ETA ebauche could equally use an Asain ebauche and retain their 'Swiss Made' status due to the relative low value of the imported component.

Single size for all hand posts, single size for hand tubes -> easier manufacturing, less space for manufacturing errors, single stock of hand tubes instead of two separate. Chinese makers also try to squeeze as much profit as they can from their operations, you know Whey you think quantities, these savings can make quite difference on bottom line.

regards

[archibald]

This point has been moot for some time. ETA has already stopped making their movements and ebauches available to repmakers via export restrictions and pricing, so whatever is going on now is how it's impacted the rep biz--insane prices for "swiss" powered reps and the birth of the high end chinese movement making industry.

[offshore]

Today I received an updated price list from my HK supplier of quartz movements.

Whilst all the Asian movements have remained relatively static, the ETA pricing, (regardless of whether the movement is of Euro or Asian origin) has dramatically increased.....like 50-100%!!

My supplier explains it thus.

ETA prices have increased from January 2008

The prices are now expensive due to the weaken USD and very strong Yen and Swiss Franc. These prices will adjust according to the exchange rates, please note.

So make of that what you will.... I sent him an email asking for an update on mechanical movcements to try and ascertain that the increase is across the board, but have not heard back yet.

My own take on it, is that ETA are driving this, and the exchange rate is a convenient excuse.

As an interesting side note, my Asian contacts, have never shown much interest in having a cross reference chart, of quartz movements... any information has been at best patchy... a sort of scatter gun mentality.

Attached to the email today is a most comprehensive conversion chart, with alternatives to ETA movements highlighted.

They have even gone to the trouble of showing dial feet positions( which I have never seen before) and have a series of side notes showing where a date or D/D may be used inside a no date case, with the dial covering the date discs! One note even specified "This replace 978.002 (ETA P/N) completely"

He also included a huge (10 pages) cross reference of hand sizes->specific movement, again something I never felt the Chinese had much interest in supplying, so it would appear our Asian friends are gearing up for life post ETA!

Another point made, was that my minimum quantity requirement per model for Asian movements has been reduced

(something I have been pushing for for a while) Whether that is just from my particular supplier (He is a watch parts trading house, who purchases from each of the manufacturers,) or whether the Asian factories have reduced his quantity requirements, is unknown.

The above is just my take on it. Given the price escalation; I will speak with another supply house next week to try and get a better feeling of the situation. It all feels rather strange, because as noted elsewhere, one would not imagine the CEO of a major corporation making a carte blanche decision to increase pricing by this magnitude (especially when ETA were in most cases at least double the Asian pricing previously) Surely it must have major impact on the companies bottom line? I would be selling Swatch shares right now, if I had any

Offshore

[musicale]

If the Asian movement factories could tighten up their QC and improve the quality of their finishing, lubrication etc, they could potentially be a huge threat to ETA. Imagine a new A7750 movement finished to ETA-level quality.

[stang]

After reading the replies and checking the latest prices on Josh's site, it appears that the price for a Swiss 7750 has risen about $200 in the last 6-8 months. A chronomat Evo used to be about $800 and they're about $1000 now. Apparently this trend will continue if I'm interpreting your comments correctly (or has the increase already been accounted for w/ weak USD and ETA's exporting restrictions?). I agree that the best solution would be Asian movements w/ similar QC to the Swiss counterparts but I don't think this will happen. For example, why improve quality when your competitor's product has increased in price dramatically ... this just makes your existing product more appealing based on the price differential. Cheaper ETAs would be an incentive to improve quality (more competition), not pricier ones.

Overall, these changes seem to be making things worse for the replica market. Too bad, I liked the trend which seemed to exist a year ago when there were more and more Swiss powered watches becoming available.

One thing I never understood was how the Asian replica market managed to obtain ETA movements in the first place. I thought ETA corporation and a number of Swiss regulations (or business practices) prevented sales of Swiss movements to non-swiss companies. At the very least I thought you had to be a well-established and reputable manufacturer of your own brand to obtain ETA or other Swiss movements. I didn't think someone from China could call up ETA and order 100 or so Valjoux 7750s and get them. Apparently, almost anyone could buy ETA movements if they wanted. Surprising.

Sorry for beating a dead horse. I didn't know the horse was dead or that anyone had ridden the horse.

Regards all,

Jeff

Edited January 26, 2008 by stang

[offshore]

I suppose the other comment to make, is that ETA, have recently closed their HK sales office!

Maybe this is also a "regaining control" move.....who knows the workings of the corporate mind?

Certainly not the Corporates!

Offshore

[musicale]

I agree that the best solution would be Asian movements w/ similar QC to the Swiss counterparts but I don't think this will happen. For example, why improve quality when your competitor's product has increased in price dramatically ... this just makes your existing product more appealing based on the price differential. Cheaper ETAs would be an incentive to improve quality (more competition), not pricier ones.

Because if a high-quality, reliable Asian movement became available that was, say, half the price of the equivalent ETA, mid-level watchmakers might decide that it's not worth ponying up for higher ETA prices... admittedly the "Swiss Made" or Swiss movement label still carries a premium.

[stang]

Because if a high-quality, reliable Asian movement became available that was, say, half the price of the equivalent ETA, mid-level watchmakers might decide that it's not worth ponying up for higher ETA prices... admittedly the "Swiss Made" or Swiss movement label still carries a premium.

Are there any "brand-name" watchmakers that use the asian clone movements? I'm under the impression that replica manufacturers are the only ones to use the asian copies of the 7750 and other Swiss movements. I agree that higher quality Asian movements would be a viable option for manufacturers using Swiss movements, although, as you said, consumers are programmed to believe that Swiss movements are the pinnacle of horological achievement. The "Swiss Made" label does carry a ton of clout with consumers. Not that this is undeserved ... the Swiss have always strived to produce the finest watches and movements available. Their reputation is definitely well deserved.

It just sucks that it's becoming more expensive to get a very high quality movement in a replica, whether it's Swiss, Asian or other.

[Nightstroker]

Not sure how long this has been up over at www.cousinsuk.com....but at any rate it is on the subject of this thread....

Hong Kong ETA shut down

Cousinsuk

Edited January 27, 2008 by Nightstroker

[Dizzy]

The quality of the asian movements is getting better and better. I wouldnt worry about ETA disappearing in the next couple years. Who cares! I have already started to switch to ordering Asian movements in most of my watches. Look at the new decorated Asian Swan neck dagger movements in the new PAM's! WOW they are nice! and according to some watchsmiths, the new asian movments are BETTER than the Swiss ETA counterparts! Equal fit and finish and better shock protection for half the price! You guys just wait.. in a couple years the Chinese movements will be rock solid and bullet proof!

dizz