Sometime in 2010, ETA, the Swatch Group watch movement making unit, will stop selling watch parts to other brands which are outside of the group. It is not exactly new information. But as the time draws closer and closer, we are more and more curious about how great an influence will be resulted from the move.
ETA is the largest and most prestigious and popular watch movement maker in the world, whose movements are what many outside brands rely on to provide “Swiss Made” watches. There are many brands under Swatch group including Swatch, Breguet, Blancpain, Longines and Omega. However, there are much more brands outside of the group in sheer need of the “ETA MADE” watch movements and other crucial components. In all likelihood the fact that ETA stops deliveries to competitors is going to happen and cause a great deal of impact on the whole industry.
Regarding the decision, Swatch Group Chairman Nicolas Hayek said, “We no longer intend to produce or deliver to third-party watchmakers. Swatch Group could cope very well without selling parts to other watchmakers. It only accounts for sales of around 300 or 400 million Swiss francs, which is some 7 or 8 percent of total sales. The loss will be small compared to all the advantages we will get back.”
The move seems like going to spell death for lots of brands. And ETA has been under a new investigation by Switzerland’s Competition Commission on whether such practices of “kill” so many watch brands that serve crucial roles in Swiss national economy is illegal and monopolistic. From another point of view, the decision made by Swatch Group leads to opportunities as well as challenges. It is a good chance for those watch brands to turn into independent watchmaking companies by creating and developing their own movements. Maybe I can’t make correct understanding how difficult to create the sophisticated parts for movements with my limited knowledge. But the news can not be all bad, because there are some other independent Swiss watch makers who want to replace ETA.
Tomorrow is the beginning of the New Year. Happy New Year!
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