[roberev]

I just received the Steinhart e-newsletter today and read that Swatch has announced that it will stop selling its ETA movements to outside companies in 2010. Is this true? If so, what effect will this have on non-Swatch companies (such as Doxa) that rely on ETA movements?

 

[weltmeister]

I just received the Steinhart e-newsletter today and read that Swatch has announced that it will stop selling its ETA movements to outside companies in 2010. Is this true? If so, what effect will this have on non-Swatch companies (such as Doxa) that rely on ETA movements?

This seems to be true and it is not the first time I read this in the past few weeks also according to a press release published in this month's Europastar, DOXA has started preparing to manufacture their own calibers in cooperation with different suppliers, I am just guessing here, they can only be 28XX derivates.weltmeister

 

[Guest]

Why should a newsletter lie ? I´ll report later on that issue.

 

[rouge]

?????

I don't know if I'd have to cry or to laugh....

Many small watchcompanies will have to stop producing, some other will have to develop some in-house movements in order to survive...

Probably the average quality level will increase, but surely the cost of all watches will increase as well....

 

[Guest]

This "story" goes back to summer 2002, when Swatch announced that they would gradually reduce delivery of ETA-ébauches to customers outside the Swatch Group and that such sales would be completely stopped by the end of 2005.
The Swiss Federal Committee for Fair Trading (WeKo)was activated by some of the customers claiming an illicit use of a position of power by the Swatch Group.
In winter 2004 an agreement was reached between ETA and the WeKo.
ETA agreed to continue delivery of their movements until 2010, but the numbers will be gradually decreased. Based on the average number of movements that a customer had bought between 1999 and 2001 as a reference, Eta will only deliver 85 % of the reference figure in 2008, 50 % in 2009, and 25 % in 2010. Price increases are only allowed in the range of the inflation rate.

Here´s the agreement (PDF, sorry only in German): http://www.weko.admin.ch/publikatio...esserohstoff-ETA-D.pdf?lang=de&PHPSESSID=951c...

Asked whether they would continue to buy Eta movements if the prices will increase w.g. Breitling answered "Yes, we have no alternative," and Dubois-Depraz even stated that they "would continue to buy ébauches from ETA even if the prices will climb up to 200 % or more, because there is no alternative."
For the customer, the result is simple: Prices for mechanical watches will continue to go up.

 

[Guest]

Excuse me, ? are you talking to me?weltmeister

No! If you are using the display mode "hybride" you´ll easily see I was talking to poster no. 1 (roberev). ;-) but I have to admit I mixed up "swatch" and "swiss". My mistake. Sorry for that. I already deleted/edited the nonsense I posted.

 

[rouge]

Mike, could this be a start for many brands to develop in-house calibres?
My thinking is that internal development costs could become competitive, if compared with the increased cost of ebauches purchased from ETA.
It could be that many watchmakers will make joint-ventures for developing and producing calibres.

In any case, the cost of watches will increase....
What is your opinion?
Thanks.

 

[Guest]

Mike, could this be a start for many brands to develop in-house calibres?
My thinking is that internal development costs could become competitive, if compared with the increased cost of ebauches purchased from ETA.
It could be that many watchmakers will make joint-ventures for developing and producing calibres.

In any case, the cost of watches will increase....
What is your opinion?
Thanks.

Well, the development of a new movement will cost a lot (up to a million Euro). As we all know Progress tried and failed in 2005, so joint-ventures seem to be an appropriate way to solve the problem.
BTW: Joint-ventures aren´t that new - remember the Buren 12 caliber.

On Baselworld 2006 some new movements showed up. I am curious how Baselworld 2007 will react ! I´ll be there ;-)

 

[Tragic]

Buy stock in sellita.

 

[lysanderxiii]

I'll bet there is rejoicing in China on the day Swatch stops exporting movements to Singapore and Hong Kong. There are many little watch casing companies that cannot afford to buy ETA if the price goes up and will turn to the Chinese watch industry.

Swatch may have shot themselves in the knee, as this decision will only strengthen the Chinese movement industry.

 

[weltmeister]

No! If you are using the display mode "hybride" you´ll easily see I was talking to poster no. 1 (roberev). ;-) but I have to admit I mixed up "swatch" and "swiss". My mistake. Sorry for that. I already deleted/edited the nonsense I posted.

thanksweltmeister

 

[Watchbreath]

:-D Hayek is known to shoot himself in the foot from time to time.

 

[rouge]

Well, it might be, but my point of view is that low level brands in this way will disappear, because of the cost increase of ETA ebauches and competition of quartz calibres (nobody will accept an unaccurate and not reliable mechanical movement and this is the present situation of low cost movements made in China). Of course, Chinese mechanical movement quality could be improved, but Japanese and Eastern Europe mechanical calibres are already on the market, having an acceptable quality level. It's a hard job..... :think:
Probably Mr. Hayek is thinking about a re-branding of ETA calibres (something similar to Zenith industrial planning, already in progress, as per Mr. Thierry Nataf <| company management) by increasing market prices of ETA movement watches (and so margins) instead of making investments in term of new high range ebauches.
It's only a matter of money.... :-(

 

[lysanderxiii]

Or, it could be an attempt to absorb the entire watch industry in Swizterland, except of course those with the ability to produce movements from scratch.

 

[Denizen]

how will it affect current owners

this is old news which occassionally gets brought up every once in a while...

but the concern that i have is what happens to all of us who own watches which are not part of the swatch group, brands who are too small to engineer their own movements. when it comes time to service them and the movement needs to be replaced, am i completely screwed over? :think:

it may be time to start stockpiling movements

Well, it might be, but my point of view is that low level brands in this way will disappear, because of the cost increase of ETA ebauches and competition of quartz calibres (nobody will accept an unaccurate and not reliable mechanical movement and this is the present situation of low cost movements made in China). Of course, Chinese mechanical movement quality could be improved, but Japanese and Eastern Europe mechanical calibres are already on the market, having an acceptable quality level. It's a hard job..... :think:
Probably Mr. Hayek is thinking about a re-branding of ETA calibres (something similar to Zenith industrial planning, already in progress, as per Mr. Thierry Nataf <| company management) by increasing market prices of ETA movement watches (and so margins) instead of making investments in term of new high range ebauches.
It's only a matter of money.... :-(

 

[Francois Boucher]

It could become very interesting!

Thanks Mike for a good summary.

Hey, it could become very interesting!

Imagine Breitling timepieces with Seiko calibers inside! :-D

 

[thodgins]

Re: It could become very interesting!

Junghans has started a new line called the 1861 line and the calibers in these watches were produced by Seiko for exclusively for Junghans. As reported on the German forum, these movements are similar to the ones found in Grand Seikos and Credors.

The 6R15 movement, found in the Seiko Spirit, is supposed to be just as good as the 2824, but can be had for cheaper.

Seiko may very well position themselves to provide more movements to European companies. The movements found in the Credors, Grand Seikos and Spirits and their SARA lines are top notch. Who knows what the future holds.

 

[Dieselweasel]

Hello Mike (and all the others),

This "story" goes back to summer 2002, when Swatch announced that they would gradually reduce delivery of ETA-ébauches to customers outside the Swatch Group and that such sales would be completely stopped by the end of 2005.
(...)
In winter 2004 an agreement was reached between ETA and the WeKo.
ETA agreed to continue delivery of their movements until 2010, but the numbers will be gradually decreased.

Perhaps I misunderstood the PDF, but I read:
ETA wants to decrease the number of ébauches, not the number of movements ("mouvements"). This would mean that it will be harder to get movements based on ETA ébauches. Complete (ready to go) ETA movements shouldn't be affected.

Asked whether they would continue to buy Eta movements if the prices will increase w.g. Breitling answered "Yes, we have no alternative," and Dubois-Depraz even stated that they "would continue to buy ébauches from ETA even if the prices will climb up to 200 % or more, because there is no alternative."

Cry wolf :rodekaart
Breitling should be able to finance the development of own movements without any problems and they have enough time to prepare.

Since I bought my first mechanical German watch about two years ago I'm watching the German watch manufacturers for their future strategy.
So here and now I've the chance to share my thoughts and theses ;-) - comments and suggestions are highly appreciated:

(1) The high level market like Lange, GO, Union Glashuette, etc. is already independent from the ETA movements:
ETAs strategy will only bring advantages for them as other brands like Breitling get more and more expensive.

(2) The midprice market with a lot of "customized" watches will divide in the prepared and the unprepared (or not able to prepare) ones.

Here I really appreciate the strategy of Nomos and Wempe.
http://www.glashuette.com/en/magazin_details92.html

The German Chronometer Norm is the right direction for the future of German watches. And with Nomos there is already a German brand with mechanical watches based on manufactory movements that cost less than 1000 EUR.
Joerg Schauer seems also to be on the right way with the Durowe movement brand (http://www.durowe.de/), but targets the market > 2000 EUR.

So far I was not able to recognize the strategy of brands like e.g. Sinn or Muehle Glashuette. And I really fear they have none :think:

Furthermore I'm really wondering if someone will be able to re-introduce / rebuild some "old" German movements like the PUW ones. The

(3) The entry level with watches like the Stowa Antea, Chronoswiss, etc. could IMHO live with the ready-to-go movements from ETA. So most of the brands <1000 EUR shouldn't be affected by the disappearing ETA-ébauches.
Watches like the Stowa Marine Original will disappear or will become lot more expensive.

For the customer, the result is simple: Prices for mechanical watches will continue to go up.

That will surely happen, as always in the past :-|

Just my 2 cents
Ralf

 

[Dieselweasel]

Re: It could become very interesting!

Junghans has started a new line called the 1861 line and the calibers in these watches were produced by Seiko for exclusively for Junghans. As reported on the German forum, these movements are similar to the ones found in Grand Seikos and Credors.

The 6R15 movement, found in the Seiko Spirit, is supposed to be just as good as the 2824, but can be had for cheaper.

Seiko may very well position themselves to provide more movements to European companies. The movements found in the Credors, Grand Seikos and Spirits and their SARA lines are top notch. Who knows what the future holds.

I'm not sure if the European market is interested in Ger-panese watches.
For me Junghans still has a bad reputation. The brand has really been destroyed by the management. And this seems to be the next step. :-(

The word "Swissmade" and therefore Swiss movements are seen as excellent quality. People know that this couldn't be cheap and therefore we are willing to invest more money than for Russian or Chinese watches.
If I read the word "Japanese" always the words "gadget" and "toy" come into my mind. A lot of people in Europe are buying cars from Toyota, Honda, Mazda,... But are these the people that buy mechanical watches? I really don't know.

Cheers, Ralf

 

[Triton]

Buy stock in sellita.

right on! the Sellita SW200 is the new ETA 2824.