The “Swissness” of watches made in Switzerland

An article in the New York Times (April 28, 2012) describes plans to change the current “Swiss-made” labeling requiring 50 % of the value of movement to be made in Switzerland, with new 80% requirement. Swiass watches account for 3 % of the units but 50 % of the $40 billion watch market. But Swatch dominates the Swiss movement manufacturing and has announced plans to cut supply of components (described in earlier blogs). In addition, luxury watch sales in China are booming. So is this new law an attempt to protect the Swiss watch industry or enable further dominance by Swatch ? Will increasing the need for smaller players to invest in capital equipment in Switzerland enable the industry to become more globally competitive or will it increase costs and cause a fall in variety and thus competitiveness ? Will such Swissness constraints hurt the opportunity to sell in China or will it increase the benefit given the new Chinese consumers need for genuine luxury products ?

About aviyer2010

Professor
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