Hi all, I have gained a lot of information from this forum, but have not posted before. However, was I wondering if any others have the same feelings as me with regards the direction the Swiss watch industry has taken?
The story started when my mother sadly died and left me a small amount of money. I decided that I would like to use some of this to buy a watch as a keepsake, so every time I looked at it I could think 'My mum bought me this'. Thing was, what watch would be appropriate? I wanted something to keep 'for best' and which would potentially last the rest of my life, so a mechanical watch seemed the way to go. It also had to not be too ostentatious or cost more than my mum would have thought 'right'.
Anyhow, I spent many hours reading up on various watches and the more I read the more I began to feel that the Swiss watch industry has become something of a confidence trick.
First of all there is the whole 'Swiss made' thing. In effect this means that the case, bracelet, dial, hands and so forth could well be made in China or other low-wage economy, along with most of the movement, but as long as 50% of the 'value' of the movement came from Switzerland and the watch was assembled in Switzerland, than it can be sold as a 'Swiss' watch. Given the comparative production costs this would seem to allow a movement to be made almost entirely in China, with a few higher value Swiss parts being added to the mix, in order for the movement to pass the '50% by value' threshold. I know there is a move to change this to 60%, but this also allows other costs to be included, such as development and design, which could conceivably see an ever lower percentage of the watch actually being engineered in Switzerland.
Speaking of movements, it seems incredible that the Swiss have managed to convince people that having an unexceptional mechanical movement available retail for under $200, such as an ETA 2824, somehow helps to justify a price tag of perhaps many thousands of Dollars. There can be no 'development costs' to pay back, given how long the movements have been in production, and they are obviously mass produced and probably never are touched by a human being. The cost to a watch assembly company that buys in its movements will naturally be much less than retail, and the cost per unit to those who make them, such as Swatch, is probably only a few tens of Dollars each. Even the cost of more up-market movements hardly reflects the premium charged for them. The rule seeming being that if movement 'B' costs $100 dollars more to make that movement 'A', perhaps because it has a chronograph function, than this justifies a price premium of at least ten times this amount for the finished product.
(As a side-issue, why is that people pay perhaps hundreds of Dollars to have these mass-produced movements cleaned and serviced? Surely it would be much cheaper to simply put in a new one when it fails?)
Then there is the whole 'special' and in-house movement thing. It seems that taking out a few screws and adding a blue finish, refitting them and adjusting the mechanism is enough to increase the 'value' of the movement many times over. In many cases one of the mass-production factories, such as ETA, will have done this extra finishing themselves for a small premium over their 'base' model. Having an 'in house' movement seems to justify an even higher premium. However, when a company like Rolex is making close on a million watches a year their movements, albeit 'nicer', are still the product of modern, low-unit cost automated production lies just as much as those made by ETA, Seagull or Seiko.
Then there is the pricing. I bought an Omega Seamaster about 10 years ago and the price today would be over two and a half times higher than it was then. I know the businesses tend to charge as much as the market will bear, but such an increase seems unjustifiable, especially given the economic events of the last 10 years.
The only real reason I can see for the Swiss being able to sell mass-produced products, very probably with a high proportion of the actual engineering work being done in low-wage economies, for such high prices, is the power of marketing. It is almost like some manufacturers realized that for some simply being able to spend $10,000 on watch is enough to justify actually spending that amount, almost irrespective of what it actually cost to manufacture the item, and so that its what they charge. This justification is bolstered by frankly laughable 'aspirational marketing' where people are encouraged to think that by buying particular watch they become James Bond (who, most appropriately, is a fictional character), or by creating associations with such as such things as motorsport or transatlantic yacht racing. This is fine I guess, but only if you are aware that you are not actually paying for a watch as such but rather the marketing campaign or image that the company is 'selling'. (And ultimately it is always the customer who pays the cost of these things). Personally, when I buy a watch I want the price I pay to more closely reflect the true cost of the engineering that went into producing it, not the cost of keeping marketing types in new BMW's or whatever.
It could be said that in many ways the Swiss watch industry is a perfect illustration of modern neo-liberal capitalism, where that the relationship between cost and 'value' is has been totally distorted. That is, the 'value' is something created by marketing men playing on people's aspirations, fears, desire for status and so forth, whilst at the same time costs are minimized in order to create every last cent of profit possible, regardless of the social implications of this, mainly by outsourcing the actual production work to low-wage economies.
Anyhow, I did manage to find a watch. Thankfully it has no associations with fictional assassins, GP racing or multi-million Dollar yachts. It is understated and tasteful, has the supposed 'cachet' of an in-house mechanical movement. It is beautifully made and gives the impression that the cost of making it was a meaningful proportion of its selling price. It was also made not in China, but that most modern of countries, Japan. I also feel that I will see fewer of them around than I do Rolex watches so it could be argued that it even has the added value of 'exclusivity' that some seem to think is worth paying a premium of tens thousands for.
I bought a Seiko SARB021. It cost me $450…
Don't be too harsh. It is my first post!
The story started when my mother sadly died and left me a small amount of money. I decided that I would like to use some of this to buy a watch as a keepsake, so every time I looked at it I could think 'My mum bought me this'. Thing was, what watch would be appropriate? I wanted something to keep 'for best' and which would potentially last the rest of my life, so a mechanical watch seemed the way to go. It also had to not be too ostentatious or cost more than my mum would have thought 'right'.
Anyhow, I spent many hours reading up on various watches and the more I read the more I began to feel that the Swiss watch industry has become something of a confidence trick.
First of all there is the whole 'Swiss made' thing. In effect this means that the case, bracelet, dial, hands and so forth could well be made in China or other low-wage economy, along with most of the movement, but as long as 50% of the 'value' of the movement came from Switzerland and the watch was assembled in Switzerland, than it can be sold as a 'Swiss' watch. Given the comparative production costs this would seem to allow a movement to be made almost entirely in China, with a few higher value Swiss parts being added to the mix, in order for the movement to pass the '50% by value' threshold. I know there is a move to change this to 60%, but this also allows other costs to be included, such as development and design, which could conceivably see an ever lower percentage of the watch actually being engineered in Switzerland.
Speaking of movements, it seems incredible that the Swiss have managed to convince people that having an unexceptional mechanical movement available retail for under $200, such as an ETA 2824, somehow helps to justify a price tag of perhaps many thousands of Dollars. There can be no 'development costs' to pay back, given how long the movements have been in production, and they are obviously mass produced and probably never are touched by a human being. The cost to a watch assembly company that buys in its movements will naturally be much less than retail, and the cost per unit to those who make them, such as Swatch, is probably only a few tens of Dollars each. Even the cost of more up-market movements hardly reflects the premium charged for them. The rule seeming being that if movement 'B' costs $100 dollars more to make that movement 'A', perhaps because it has a chronograph function, than this justifies a price premium of at least ten times this amount for the finished product.
(As a side-issue, why is that people pay perhaps hundreds of Dollars to have these mass-produced movements cleaned and serviced? Surely it would be much cheaper to simply put in a new one when it fails?)
Then there is the whole 'special' and in-house movement thing. It seems that taking out a few screws and adding a blue finish, refitting them and adjusting the mechanism is enough to increase the 'value' of the movement many times over. In many cases one of the mass-production factories, such as ETA, will have done this extra finishing themselves for a small premium over their 'base' model. Having an 'in house' movement seems to justify an even higher premium. However, when a company like Rolex is making close on a million watches a year their movements, albeit 'nicer', are still the product of modern, low-unit cost automated production lies just as much as those made by ETA, Seagull or Seiko.
Then there is the pricing. I bought an Omega Seamaster about 10 years ago and the price today would be over two and a half times higher than it was then. I know the businesses tend to charge as much as the market will bear, but such an increase seems unjustifiable, especially given the economic events of the last 10 years.
The only real reason I can see for the Swiss being able to sell mass-produced products, very probably with a high proportion of the actual engineering work being done in low-wage economies, for such high prices, is the power of marketing. It is almost like some manufacturers realized that for some simply being able to spend $10,000 on watch is enough to justify actually spending that amount, almost irrespective of what it actually cost to manufacture the item, and so that its what they charge. This justification is bolstered by frankly laughable 'aspirational marketing' where people are encouraged to think that by buying particular watch they become James Bond (who, most appropriately, is a fictional character), or by creating associations with such as such things as motorsport or transatlantic yacht racing. This is fine I guess, but only if you are aware that you are not actually paying for a watch as such but rather the marketing campaign or image that the company is 'selling'. (And ultimately it is always the customer who pays the cost of these things). Personally, when I buy a watch I want the price I pay to more closely reflect the true cost of the engineering that went into producing it, not the cost of keeping marketing types in new BMW's or whatever.
It could be said that in many ways the Swiss watch industry is a perfect illustration of modern neo-liberal capitalism, where that the relationship between cost and 'value' is has been totally distorted. That is, the 'value' is something created by marketing men playing on people's aspirations, fears, desire for status and so forth, whilst at the same time costs are minimized in order to create every last cent of profit possible, regardless of the social implications of this, mainly by outsourcing the actual production work to low-wage economies.
Anyhow, I did manage to find a watch. Thankfully it has no associations with fictional assassins, GP racing or multi-million Dollar yachts. It is understated and tasteful, has the supposed 'cachet' of an in-house mechanical movement. It is beautifully made and gives the impression that the cost of making it was a meaningful proportion of its selling price. It was also made not in China, but that most modern of countries, Japan. I also feel that I will see fewer of them around than I do Rolex watches so it could be argued that it even has the added value of 'exclusivity' that some seem to think is worth paying a premium of tens thousands for.
I bought a Seiko SARB021. It cost me $450…
Don't be too harsh. It is my first post!
