Time is ticking for ETA customers

[Alcan]

ETA ebauche customers such as Breitling, Oris, Steinhart, IWC, etc, will soon have to start buying completed ETA movements, look elsewhere for eabuches (Sellita maybe?), or start producing their own movements. I'd guess that this will tend to drive up the prices of their watches, too.

The workhorse caliber 2824-2 as well as other ETA movements are now being cloned by Sellita, who, with purchases of about one million movement blanks annually for years, was ETA's biggest customer .


FYI:

"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 ebauches 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."

[buz-lh]

Al, this a problem that a lot of watch manufacturers will be facing. I think some will go with Sellita and others are busily developing their own in house movements. There was a rumor floating around a few months back that Rolex was buying Sellita to ensure movements for the Tudor line, but I have seen nothing to substantiate that. It will get interesting that's for sure.

[cody p]

technotime sa is another potential supplier.

[topcat30093]

It looks like there are interesting times ahead for some watch bands,if they don't act soon.

[lorsban]

I think Swatch just shot themselves in the foot by limiting production. All this does is open the door for other (cheaper) manufacturers to come in, taking a big slice of the pie.

This doesn't make sense to me. Why limit production on a product which obviously has a huge market? And even if the patents have expired, allowing others to make clones, why give those clone manufacturers leeway to move their product?

What Swatch should've done was to either create their own "low-end" movements manufacturing outfit (economies of scale would dictate that they could price themselves lower) or simply buy out the smaller guys.