WatchGuy Survey – Swiss Watch Industry

You are of course all aware by now that the Swatch Group will not supply parts to the free trade as of 1/1/2016, just as all the other watch brands have done for quite a while. We are not happy here at WatchGuy, as we believe that you, the customer, should choose where you get your watch serviced or repaired. As the Swatch Group has 72% (counting ETA movements as well) of the Swiss watch market, this will have huge impact.

We have put together a little survey for Swiss watch customers, and we would really appreciate if you could take the time to fill that in. If we get enough responses, we will submit the results to the Federation of the Swiss Watch Industry in Biel for discussion. You can contact the Federation directly at their web site contact form if you would like to ask them to make spare parts for all Swiss watches available to the independent trade to allow you to make your own decision on where you want your watch serviced.

Please also share the survey link with fellow watch enthusiasts, and post it to forums etc. so that we get a relevant sample size. Thank you all!

Some background information

With the Swatch Group’s decision to stop supplying the independent watch repair trade as of 1/1/2016, no Swiss watch manufacturers are left supplying parts freely.

The Swiss watch industry sells roughly 24 million units each year, including low-end brands such as Swatch and Flik Flak, and the sector that is worth being serviced and repaired (above £700) should be around 15 million units p.a.

ETA supplies 72% of all movements used in the Swiss watch industry, and it sells 24% of the movements it produces to non-Swatch Group companies.

If we assume that a watch lasts an average of 30 years (that is a very low estimate), there are roughly 450 million Swiss watches out there that will need regular service and repair. Let’s again estimate on the low side, e.g. this is due every 10 years, that means 45 million watches require a service or repair every year.

At Swatch Group service prices (starting at about EUR 350 for a simple movement), this is a 3.5 billion EUR market in Europe alone.

Independent repairers charge about half of that for a service, so the savings potential for Swiss watch owners is in the order of 1.75 billion EUR, not taking into account more expensive watches, such as Rolex and high-end Omegas, where the service price is considerably higher.

So far, the independent watch repair industry in Europe has had free access to Swatch Group spare parts, including ETA parts, which has allowed it to employ roughly 15,000 independent repairers in Europe. With Swatch Group threatening to cease supply, independent repairers have to invest close to EUR 50,000 for workshop equipment specified by the Swatch group to obtain a parts account, which would enable them to continue their trade. As most independent watchmakers work on their own, the entry cost is prohibitively high. Rolex prescribes equipment for over EUR 100,000 in order to supply spare parts. Independent repairers already have the necessary equipment to service watches, but not necessarily the exact equipment manufacturers prescribe.

We don’t dispute that watch manufacturers set up a network of accredited service centres, but we think that parts should be sold to independent repairers as well, so that customers can freely choose where they want their watch serviced. Prices at accredited service centres are twice as high as those of the independent trade.

The car service industry has such a two-tier model, which seems to work very well, and the watch service industry lends itself to the same model, taking into account that the average car is far more complex than the average watch.

22 thoughts on “WatchGuy Survey – Swiss Watch Industry

  1. I found this blog because I have been wanting to get into collecting mechanical watches. I was looking at a Marathon CSAR and some others.

    The CSAR has an ETA Valjoux 7750.

    But now I want nothing to do with anything that has an ETA movement because I may be held ransom by Swatch at some point in the future for an over priced service.

    I will not buy anything that uses an ETA movement.

    Swatch clearly wants to have a monopoly on ETA work so they can gouge people, but there are always unintended consequences for actions.

    I wonder how many others there are out there (like me) who will now boycott ETA movements for their own protection?

    …. and of course I will boycott any Swatch company product in the future.

  2. done I strongly support the right of independent watch service people like Christian to have access to manufacturers part
    my watch will be going to Christian as soon as I can obtain a slot.keep up the great work that you and mika do
    frank

  3. I`d like to add my support. I service and restore watches on a hobby basis in retirement and I have an excellent reputation with the folks who’s watches I`ve fixed. However, it simply isn`t feasible for me to make the major expenditure required to gain accreditation and thus maintain a supply of parts. It’s likely I`ll be forced to give up. and I`m sure there will be other like me in the same position. However, I sympathise with the small commercial repairers who still rely on watch work for their livelihood. This decision is wrong and I fail to see how it will safeguard customers or do anything to enhance the brand reputations.

    Paul Walker

  4. Only just stumbled on this excellent website!
    I own several Swiss watches, many will need Swatch ETA parts on an ongoing basis.
    Swatch are doing their customers and themselves a disservice by limiting supply of spare parts in such an unreasonable way.
    Whilst I would send my Seamaster Chronometer direct to Omega for service, I have several ETA 7750, 7751, 2892 movement watches which I send to competent independent watchmakers for service and repair. As pointed out in the article the Independent prices are half of the major manufacturers service prices.
    As a long term Swiss watch collector I am very concerned about the actions Swatch propose to take.

  5. Done! I have also voiced my opinion with Swatch group at various levels.

    Apologies for the delay in completing the survey chaps – just back from east NL/western Germany holidays 🙂

    Keep up the outstanding work!

  6. In the short term, I completely agree that independant watchmakers should have access to the parts needed to service watches locally to the standard they deserve.

    In the long term, I think it’s short-sighted of swiss manufacturer ETA/Swatch. Particularly when companies such as Sellita are increasingly able to emulate and improve on quality. Will there come a time when the cache of having a ‘swiss’ watch is no more? Perhaps not, but as consumers become more educated in all things horological through blogs and forums, they may decide to spend their hard earned money elsewhere. Thus reducing the percentage of quality watches being bought from Swatch group.

  7. I’d have been happy to give my two-pennyworth because I very strongly object to any free market being bullied, manipulated and stifled by big corporate interests.

    Unfortunately I don’t own a watch (Swiss or otherwise) so couldn’t complete the survey.

  8. I’ve filled in the questionnaire, but in doing so wrongly named a retailer as the worst I’d found for service. I’ve since checked and it was a company beginning with “G”. Anyway, I’ll be happy to correct if you want me to.

    As for the restrictions on independents access to parts in the future. Rather than possession of machinery meeting a particular specification, wouldn’t it be better if the necessary criteria was a demonstrable ability to carry out the work?

    This could be by exam or peer review, like any profession.

  9. Pingback: 1 Jan 2016 is looming large: Swatch Group is going turn off the ETA lights.

  10. You also might want to contact the US Trade Commission concerning monopolistic practices. Then again maybe not as; ‘The best politician is the one who stays bought.”

  11. Done, filled out the survey. I fully support your efforts, Christian. As you mentioned in another post, the prices are already going up – I recently bought an ETA Quartz movement for an old beater no-one wanted to fix (so I did it on my own) and the price at cousinsuk rose by about 20% in the space of a week (and by another 20% after I bought it).

    One potential objection that ETA might raise (and attempt to minimize the results) is that this is not really a random sample – it is like standing in front of a stadium after a football match and asking people who are leaving whether they like football. Unsurprisingly, your results would lead you to conclude that *everyone* likes football, just as you find that people who read your blog and thus probably value your work and service prefer you over less personal and more expensive alternatives. I mean I am just the same as everyone else here, as far as repair preferences are concerned.

    I don’t think this is enough, though. If there are 4 million people who require service every year and they represent billions of pounds to the industry, then 300 people are not enough to convince ETA to step away from billions of pounds in revenue. And threatening that we shall stop using them is a fairly non-effective threat – they cover so much of the market that they can afford to shrug us off (they have an existing base of 50 million users), and if there is an independent maker who will expand too much (like Nomos, for example), well, they will just buy them and get them under the ETA umbrella.

    So (a) soft approach is to say look I understand you want to make money, but why not make it in a way, where you are not universally hated by your customers? You’ll still make money by selling parts, but you won’t appear to be egotistical assholes while doing so.

    a harder approach is (b) to get EU to force ETA to stop monopolistic practices. By threatening them first, then imposing heavy fines, then preventing import. I does not matter if Switzerland is not in the EU – I they want to peddle their wares in EU they will follow the EU regulations. About a year ago the Swiss decided to restrict student exchange opportunities saying that they do not answer to the EU as far as Higher Education policy is concerned. EU said fine, and cut all grants to Swiss higher education institutions (millions of Euros per year). That got student exchanges reinstated rapidly. My point is that in our case leveraging EU might be a good approach.

    David

    • Good points, David. Ultimately, if you have to return your watch to Swatch for routine maintenance at a price they set arbitrarily and without competition, you don’t really own your watch, you are leasing it from them at a rate they can raise every five years. This could have a large negative impact on the mechanical watch boom — and/or be very helpful to the Japanese makers.

  12. 368 returned surveys, and the trends are now pretty stable. Independent watch repairers beat the service centres in every aspect. I thought we would be lucky to draw even…

  13. Hi Christian & Mitka
    Sincerely hope that this helps to change the decision of the Swatch group.
    I wouldn’t hesitate in choosing you to service my Omega in the future.
    Best of luck
    Phil

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