Swiss vs. Japanese: Out-House Movements?
November 17th, 2009 Posted in Orient News | 6 Comments | Comment and Win a Free Orient Watch Comment and Win a Free Orient Watch
Swiss watch companies that produce their own movements are rare and exclusively among the most expensive in the world. The majority of Swiss-Made watches’ movements are created by ETA SA, a company with several models of movements that are mass-produced and shipped out to Swiss watch companies. The Swiss watch companies then assemble the watches to market and distribute.
What do the Swiss have to say about the quality of being Swiss-Made?
The Federation of the Swiss Watch Industry is a regulatory organization that created a law governing the use of the Swiss Made logo on watches: “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.”
Also stipulated by the law is that 50% of the movement’s components must be Swiss-made and must be assembled in Switzerland.
This means the law:
- Eases regulation requirements that ensure quality
- Creates economies of scale to drive down cost
- Helps copyright protection
In the industry, this system of one movement-producing company supplying the watch companies is known as the “Ebauche tradition.” This means Swiss watches of all price-ranges essentially carry the same or very similar movements.
You may be surprised by some brands that outsource their movements:
- Tag Heuer (a recently released premium model features in-house movement)
- Breitling(released an in-house movement watch this year)
- Frederic-Piguet
- Jaeger-LeCoultre
Any watch expert can tell you that these watches are thousands of dollars, yet they lack an in-house movement. They may be excellent products, but they are exactly that – products. Japanese watch companies offer distinctive mechanical watches with in-house movements for prices in the low hundreds.
Buying a Brand
Quite often then, when purchasing an expensive Swiss watch you pay thousands of dollars more for a watch with a movement that can be found in an alternative watch for thousands cheaper. Aside from any precious metals found in the more expensive watch, you are paying thousands of dollars more for a brand. This brand was built by smart brand management and huge marketing budgets.
In this way, many of the Swiss watch companies seem to be more marketing companies than watch makers.
So, a “distinctive” mechanical watch that cost six thousand dollars and is Swiss Made, isn’t really all that distinctive. Clearly, the Swiss concept of quality adheres to the philosophy of accountability being tied to quality, as they want as many of the parts of the watch to be made in Switzerland.
However, if this relation does exist, then wouldn’t an in-house movement-produced watch be superior in quality, because it is accountable for the entire watch production process?
6 Comments | Comment and Win a Free Orient Watch
By Brian on Jul 13, 2009
I don’t disagree that Swiss watches are over priced and not always superior to their foreign competition but you seem to put a lot of value on this “in house” movement issue. There are a lot of advantages to having a particular company which supplies many. ETA specializes in mechanical movements. They do nothing else and hence have become very good at what they do. Their movements are very good and very reliable! The mass production helps keep cost down and allows the watch makers to sell to a larger market. Also, many watch making companies who use these ETA movements also customize them to their specific needs. For example, Breitling use several movements from ETA, among them the much coveted Valjoux 7750. They then modify the movement to suit their needs. Every Breitling watch (their entire line up) is a certified chronometre. The Valjoux 7750 movement by itself simply provides a chronograph function which does not meet the chronometre standards of the SOSC. Just look at the advantages that outsourcing has brought to the auto industry!
By RobG on Jul 26, 2009
Good article! The in-house design teams have more control, may be able to make them for less cost and higher reliability…and have the option of customization without the hassles of patent infringement too.
ETA profits might hurt a bit if everyone did this.
Stamping the parts required in Asia also has a cost-reduction factor. If a watch company can swing it, they should…unless their movement design is awful in which case the market would soon react appropriately.
-Rob
By Orient - Derek Kuyper on Aug 7, 2009
A good point about the benefits of specialization, Brian. The article is working off the tentative assumption that accountability ensures quality (or in light of your comment: the gains in quality from direct accountability within the watch industry surpass the gains in quality offered by specialization). This is a complicated issue that depends on specific dynamics within markets, but you might be interested in checking out:
http://www.youtube.com/watch?v=lgwTnAlX2LU
This is a video where an independent horological education institution compares a common Swiss ETA movement with the Orient movement. The evidence presented within the video may make the accountability ensuring quality assumption quite valid, as it seems to favor the simplicity of design offered by the Japanese watch makers movement.
One possible reason specialization may not be optimal for the watch industry is the holistic nature of mechanical watch making.
A watch, unlike an automobile, has only one direct function–to keep time through the manipulation of conversation of energy laws. Automobiles provide multiple functions (GPS, transportation, Entertainment etc) involving the manipulation of many physical laws. Thus, a car producer being able to directly manufacture, much less engage in research advancements in so many incredibly diverse fields is quite a burden.
Accountability can only offer greater quality if a firm can actually effectively manage the organization–this becomes difficult as firms grow larger (the case of automobile companies).
After a certain point, a firm is more accountable if they are choosing finished products from a selection, rather than producing everything in house. I do not think this is the case for the watch industry; thus, in-house movements may be superior.
All of this is not meant to belittle the Swiss movements or watches–they are great products that, like Japanese-produced watches, can be passed down through generations–but rather, is to shed light on what you are paying for when you purchase a mechanical watch. When you purchase Japanese, you are paying for the watch itself. When you purchase Swiss, you are in effect paying for a watch and a huge marketing campaign.
By Brian on Aug 13, 2009
Great video Derek and very well said. I have to agree that bang for the buck, Orient watches are pretty hard to beat. I especially like the blue “Mako” diver. The only thing I would like to see different is a sapphire crystal. My experience with mineral crystals is that they are not tough enough for my day to day activities.
There are certainly arguments to be made on both sides but I do have to agree with you on the accountability aspect of in house movements. I can’t see any argument against anything Japanese made to tell you the truth. Be it a car or a watch, the Japanese hold very high standards in manufacturing. I know this from personal experience having worked for a Japanese firm for 2 years in the past.
Orient watches appear to be a tremendous bargain when compared with their Swiss counterparts. The simplicity of the mechanical movement would prove to be more reliable over time and less expensive when it comes time for service. This appeals to those of us who are more practical and work hard for every dollar we earn. That being said, some people are more attracted to pieces which are more complicated. To many watch aficionados, the more complicated a movement is, the better. Although I can appreciate this, it does not turn me on like it does some. Derek you actually come across (and please take this in the most respectful way) as someone who would appreciate a very complicated movement. I say this because you seem very knowledgeable in this field and are obviously very interested in it. I just enjoy a nice watch whether it is a $50 piece or a $50,000 piece. Take care and please keep the articles coming as your writing is most enjoyable to read. Thanks.
Brian
By Greg on Nov 20, 2009
Seriously? Listing Jaeger-Lecoultre as a watchmaker that outsources it movements? JLC has been an innovator in watch movements and manufacture since the 1833 and to this day produces all its movements in house. Some very simple fact checking is definitely in order.
I have 4 Orient autos and really do like them but what are you guys thinking?
By Raj on Dec 12, 2009
I have just bought my first automatic watch with Swiss movement (certina Podium) and am very happy with it but would like even a simple and yet very reliable Japanese movement. Any suggestions?