Tissot boss explains watch sector record

François Thiébaud says a Swiss watch stands for quality and respectability (Tissot)

The watchmaking industry has clocked up another record year. Exports in 2006 rose 10.9 per cent, to exceed the SFr13-billion ($10.4-billion) mark for the first time.

François Thiébaud – president of the Tissot watch company – tells swissinfo that a Swiss watch is a trademark both for quality and respectability.

The total value of watch exports last year was SFr13.7 billion, described by the Federation of the Swiss Watch Industry as a “remarkable result”.

The federation, which is based in Biel, said demand remained strong throughout the year, particularly for luxury products, which acted as a locomotive for the industry.

The sector has now posted three years of strong growth, following a 9.2 per cent increase in exports in 2004 and an 11.5 per cent rise in 2005.

swissinfo: Once again the Swiss watchmaking industry has done better than expected. What is the reason behind this success?

François Thiébaud: The jewellery and watchmaking sectors have benefited from a worldwide economic upswing. North America, which remains our main market, has recorded notably high growth rates. The emerging markets of China, India and the former Soviet republics are also making an increasing impact on our industry.

Consumers in these countries have begun to satisfy their basic needs as a result of the economic boom. And those who also want a taste of luxury buy artwork or our best watches.

You can understand the importance of these markets when you consider the size of these countries. They have an enormous potential for us even if only one per cent of the population is considered to be among the rich, because it still means millions of new clients.

swissinfo: What’s counts more for Swiss watches: quality or image?

F.T.: It’s a bit of both just like for French fashion or Italian design. Switzerland has long-standing tradition and experience in the watchmaking sector. Every element has to be perfect. The Swiss are renowned for their skills and precision.

Switzerland stands for what I would describe as solidity and calm. Watchmaking is simply measuring time and checking it. Those who buy a Swiss watch appreciate this calmness and matter-of-factness.

swissinfo: Is this apparent link with Switzerland and its values threatened if watchmaking firms continue to move their production abroad or import components?

F.T.: The image of Swiss products could suffer. But we are the only industrial sector benefiting from special protection by federal decree. It sets the criteria that allow us to use the Swiss Made trademark.

[But] we are part of an increasingly globalised economy and there’s no way of ignoring it. Production costs become an important factor in an export-oriented sector. This means we don’t hesitate to resort to imports if necessary.

It’s no different, for instance, than for a car. Do you think every single part of a German car is produced there? Our watches are designed, assembled and checked in Switzerland and the trademark is a guarantee for the product all over the world.

swissinfo: New ideas are crucial in order to stay at the top. What kind of technical or marketing innovations are there in the watchmaking sector?

F.T.: If you want unique, original ideas, you have to consider technical aspects such as the basic material used, but also the dial, the watchcase, the wristband and the design of the hands. Nothing is excluded and it’s even possible to have asymmetrical shapes.

A timepiece is worn differently nowadays. Watches have an identity, they have become accessories that blend with the owner and become an integral part of him.

Time itself has become the only thing in our world that is limited and defined by hours, minutes and seconds. But there are unlimited possibilities to present and wrap it.

swissinfo, Marzio Pescia

Key facts

Watch exports 2006

Total: SFr13.7 billion (+10.9% compared with 2005)
Growth was 9.2% in 2004 and 11.5% in 2005

Largest markets:
United States – SFr2.287 billion
Hong Kong – SFr1.945 billion
Japan – SFr1.267 billion
Italy – SFr 901.3 million
France – SFr813.2 million

Swiss Made

In the watchmaking industry, the Swiss Made label is defined by a 1972 federal decree.

A watch or clock is considered a Swiss product if its mechanism is Swiss and if the timepiece is finished and checked in the country.

A watch movement – the heart of the watch – is considered Swiss if at least 50% of its components are made in Switzerland.

Experts argue that these rules will have to be amended as an increasing number of elements are produced in Asia as a result of the globalised economy.