cnmark wrote: First:
Prices are kept high by ETA arbitrarily doubling the prices for movements. The non Swatch Group watch companies have to pay these prices if they want to stay in business while continuing using ETA movements - but shurely they will hand the additional cost down to us.
The first wave of price increase will hit Hong Kong on July 1st. Watches previously in the USD 500 range (list price) will rise in price by up to 75%(!) - putting them closer to the USD 1000 price range.
More expensive watches will see a price increase by 15% to 35% - depending on make and model. Oh, and by the way - rumors here in HK have it that Swatch Group brands will most likely have the lowest price increase.
Second:
"Swiss made" defined by 80% of cost incured in Switzerland for mechanical watches.
This will not keep some manufacturers from importing Chinese movements as parts kits and assembling them in Switzerland. The high cost of manual labour in Switzerland will give the watches made with these movements the attribute "Swiss made". Seagull already delivers tourbillon movement kits to Switzerland - wait for the first "Swiss made" tourbillon with a Seagull movement.
Not sure this is all that correct...the current requirement also includes a statement that in addition to overall cost:
Moreover, a law "regulating the use of the name 'Swiss' for watches" sets out the minimum conditions that have to be fulfilled before a watch merits the "Swiss made" label.
This law is based on a concept according to which Swiss quality depends on the amount of work actually carried out on a watch in Switzerland, even if some foreign components are used in it. It therefore requires that the assembly work on the movement (the motor of the watch) and on the watch itself (fitting the movement with the dial, hands and the various parts of the case) should be carried out in Switzerland, along with the final testing of the movement. It also requires that at least 50% of the components of the movement should be manufactured in Switzerland.
It is my understanding that the new law would raise the "components" level to 80% also.
I don't really see this as an arbitrary raising of ETA movement prices by SWATCH, but rather as a way to control the production quality of the movements bearing their name. In 2010, all ETA movements will have to be bought as completed assembled movements, not as ebauch parts kits which those of unknown training and skill levels are allowed to assemble. The cessation of the selling of parts kits will cut into the ETA profit levels and the only way to make up for the loss is to increase the price of the completed movements. This is NOT arbitrary...this is a business decision which involves maintaining quality control over the finished product and thus company name/reputation without a drop in overall profit! To me, this move is a step in the right direction as now, watch companies will also have to become more than designers and assemblers.
jmho
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