We all use the term Swiss watch industry regularly when talking about the titans of the luxury watch industry, but it is often believed that this term relates simply to watches manufactured within Switzerland or luxury watches as a whole.
There are, in fact, luxury manufacturers elsewhere in the World. However, the incredible reputation of the phrase “Swiss-made” cannot be bandied around; the industry has a few vital caveats that keep it protected and make it stand out from the rest.
1. Switzerland are responsible for nearly all of luxury watch production - and export 95% of it
As we mentioned earlier, Switzerland is instantly associated with the art of fine watchmaking. As far as luxury watch production is concerned, the nation makes almost all of it and exports 95% of it around the world. This is proof that not only is global demand for luxury watches impressive, but that the Swiss watch industry actually has what is a near enough a monopoly of the market.
Along with theses figures, the Federation of the Swiss Watch industry reports that last year units in excess of 29.3 million were exported at a value of 22 billion Swiss Francs.
3. The Swiss watch industry is controlled by just a handful of conglomerates
There are multiple manufacturers that we all know and recognise, and it is often assumed that these brands are in tough competition with one another to capture market share.
In fact, there are a few large conglomerates that have control over a powerful stable of renowned brands. The major brands are associated as follows:
Swatch Group: Swatch, Omega, Harry Winston, Tissot Richemont: Montblanc, Piaget, Cartier, Alfred Dunhill LMVH: Tag Heuer, Hublot, Zenith Rolex: Rolex, Tudor
Brands who are stablemates with one another have been benefitting massively in 2014 - and will continue to do so in 2015 - from the trend of purchasing many of the suppliers used in the production of their watches.
This not only helps to improve production capacity, but it also gives a greater control over numerous essential watchmaking components. It is essential for the development of in house movements and for the hand-finished touches added to much of the machined componentry.
There is also another benefit for these brands - international powerhouses in their own right - to belong to even more powerful conglomerates. With exports being as high as they are from Switzerland, the conglomerate gives each brand unrivalled access to retail and distribution outlets all around the world.
3. The term ‘Swiss-made’ is not used lightly
To be labelled as a ‘Swiss’ watch, there are strict stipulations in place that protect the industry. This has resulted in unique locations in Switzerland becoming havens for watchmaking.
By governing the term so strictly, the quality and precision associated with the term has been guaranteed. This is part of the reason that the Swiss watch industry continue to thrive, despite being pronounced ‘dead’ in the past.
In order to be labelled as Swiss, a watch must utilise a movement that is Swiss - meaning it was assembled, placed into a case and assembled within Swiss borders. At least half of the components used must also be Swiss (explaining the trend mentioned earlier about big brands buying up component suppliers). This is calculated by value and a newer, more recent amendment to the policy quoted by the Federation of the Swiss Watch Industry states that a minimum of 60% of the production cost involved must be generated in Switzerland.
If these requirements are met, there are other claims that a manufacturer can make such as “Produced in Switzerland” or “Designed in Switzerland”.
Protecting the identity of the Swiss watch industry is taken very seriously and counterfeiting can sometimes be a real issue. You can learn more about the Federation of the Swiss Watch Industry’s efforts to combat counterfeiting here.
For the official requirements of “Swissness”, you can view the full legislative document here