Swiss vs. Japanese: Out-House Movements?

April 10th, 2012 | 31 Comments

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.

Check out this video of the School of Horology comparing an ETA SA movement with an Orient Watch movement:
 

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?

  1. 31 Comments | Tell us what you think!

  2. 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!

  3. 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

  4. 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.

  5. 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

  6. 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?

  7. 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?

  8. By Nic Oatridge on Mar 30, 2011

    Orient are nice watches but I don’t understand the issue about outsourced movements or mass production. Even Rolexes are mass-produced and most Swiss watchmakers use quite advanced technologies in the manufacture of their watches. The point is that both the bought in and mass-produced watches often have a lot of hand finishing, and also the components are of a very high quality – higher than is strictly necessary some would say, but that’s part of the attraction of premium watches. I don’t think Swiss watchmakers are excessively profitable compared to other industries, the margins are eroded by marketing, the quality of the materials and the amount of labour required in the manufacture and they do have a number of lovely models that compete in the same price range as Orient.

  9. By Dennis Pollard on Sep 20, 2011

    I’m a watch collector (of sorts) and like reading about the differences in watch movements – quality and affordability. I have both watches from japan and swiss manufacturers. Both countries manufacturers have quality products.

  10. By robert on Oct 6, 2011

    Here’s what I think. No matter what your watch cost, no matter what engine you have in it the time will be the same. Fifty dollars or a million dollar watch.Its all accurate time. After time reading its about how it looks to you.You dont have to spend alot of money to look good. Unless you want a look at me watch.( THE BIG NAME WATCHES for people who want to be notice. Yes there are people who really enjoy fine time pieces and do collect watches.Thats great. But again its about telling time and they all do a fine job in tell time.Thats how I feel .A nice looking watch at a low price , 100 to 500 works for me.In house movements out house movments who cares.

  11. By gary malloy on Oct 10, 2011

    I am very dissapointed to report on how many of my “Swiss” watches I have opened only to find “made in china or Hong Kong” stamped inside them. Notably a Wenger Swiss Army with a case and bracelet “made in China” leaving only the movement possibly Swiss. A contact at Wenger said “they only have to be 51% Swiss.
    Two Tissot’s both made in China.
    A Bulova with Japanese movement and Hong Kong bracelet!!!
    What is the point in paying the price for a Swiss watch, you may as well buy a Chinese one to start with.
    Seems to me the Swiss watch companies are doing their own fakes!

  12. By Andres cox on Dec 2, 2011

    The video is very helpful, what makes the Swiss made watches so expensive, is it really worth it .? Will the movement on an Orient,Seiko,Cityzen, will as good as a Swiss made watch?

  13. By Dan on Dec 25, 2011

    Gary what did you expect. Just asking, cause most SWISS watches begin from 1k. What you have been listing are products that are “swiss” watches available for those who can’t afford a good one. Not trying to argue or anything just saying you should check out some more famous names

  14. By Nick on Jan 17, 2012

    Absolutely untrue- Jaeger-LeCoultre makes every single one of their movements in-house and has produced over 1000 individual manufacture movements. Other companies (Vacheron Constantin, A-P, and IWC to name a few) purchase JLC ebauches for use in their watches- that’s how good JLC is. Learn to research things before you stump for a brand…

  15. By Mr watch on Jan 27, 2012

    Most of the Swiss watches carry a ETA movement – so WHAT do these reputable Swiss watch companies with over a hundred years of heritage in watchmaking precisely do, other than provide the cosmetic look and the band. Not much huh??
    Rolex is the only brand with it’s own movement, and foolishly I do not have any in my collection. What a mug.

  16. By crisanto on Mar 12, 2012

    Never tried to use swiss watch cause the price in higher than the japanese watches. I use Seiko 5 automatic and seiko divers automatic watch. they have good performance.
    Its realy difficult to buy original swiss watch most especially simple employee with simple earning. As long as your watch never stop and always accurate.You are always on time

  17. By Agnius on Apr 26, 2012

    I tell you what guys . I am appeased with watch
    all kind off watch a specially Swiss made maybe 15 years ago I started to look for watch that I fancy and love,watch that I can wear every day, the watch which will work with my heart beats.
    And that’s why I don’t have a watch !!! Look on your wrist and tell me is that watch what you wanted or its just a Christmas gift or some colleges gave you as a gift on your special occasion , you going to wear this watch for a year or two and then what ? then you will say – o look John have a nice new watch – its time for me to get better then Johns watch. And what , you will sell your watch on eBay or second hand luxuries site. My moral is the watch is time , and time is precious , save your time .And there is no cheap or to expensive, there is what you like and want . I see I got to exited , about the movement and price, some people buying watch because it has famous brand on it and it doesn’t matter what is the heart of it, but it looks good ! , so most of cheap watch are made for that type of people. And good watch, exact watch is for people who don’t want to show off , they feel the watch and feel good about because inside they know , what is exactly on your wrist . Thanks for listening …..

  18. By Louis delValle on May 10, 2012

    I always knew that ETA watches were overpriced, and that most Swiss watches were really the same. However, I would have never thought that Orient movements were superior. It stands to reason though, given that monopolistic tactics do not lead to innovation.

  19. By andymc on Jun 2, 2012

    I opened up my new tag heuer aquaracer watch which cost me £1000 and only one week old.
    Thought i would check it out after seeing this info.
    What a shock.
    It was using an eta swiss movement.
    Got the code number off the movement and googled it.
    Came across a site that was selling the exact move ment for £20.007
    I screwed the back on went back to the shop and got my money back.
    Oh another thing. Tag charges £ 195 for a battery change, a so called service and pressure test .
    They tell you to never take the back of the watches yourself because of contamination. Lol. More like they dont want you to see the cheap swiss movement in them. I can get a new battery fitted and pressure tested for £30.00 from most watch shops.
    Went and purchased an eco drive watch.
    Open up your expensive watches then hold your breath.

  20. By Joe Delgado on Jul 14, 2012

    I disagree in the world of watches companies that do everything in house make great products that last for centurys in some cases and if a watch goes wrong they can have it back to you in no time.Thats how great companies became world renoun. If you out source your part it cost the customer more and the other company doesn’t really care about the parts cause the mass produce them and the bear no responsability with the customer..Just like TVS and The American Auto industry it always cost more to import any thing..I as a customer alway love to hear that everypart of my piece is in house it keeps me loyal to that company and keeps me purchasing…Who better to tell you how to fix your watch then the watch maker…

  21. By Mose Scheetz on Jul 15, 2012

    Despite the cheaper cost electronic wristwatches, i still do prefer to use mechanical watches since they look more elegant. ,,`”, Best regards health and well being blog

  22. By Luxman on Jul 28, 2012

    It is excellent, I reall enjoy reading and also I intend to print a book touching all the watches

  23. By Richard Dudley on Aug 26, 2012

    I have many automatic wristwatches, Swiss, Japanese, Chinese, older, newer and they all work just fine. When you open an expensive Swiss watch, it looks like a piece of art and has more labor involved. For the average person, though, most regular affordable Watches will give you very good service. It boils down to which one you like the looks of and how much you can afford.

  24. By Wan Yoke Choon on Jan 6, 2013

    I own a Seiko 5 automatic watch. The reason for my choice for an automatic watch is it is eco-friendly. It does not need battery and use only the energy converted from motion. After watching the video I am really impressed by Orient’s simplification of the watch movement. From the 6 wheels used in the Swiss movement, they managed to use one wheel to accomplish the same objective. Undoubtedly this will reduce material and resources required to produce it. Kudos to Orient and may they bring more eco-friendly innovations to watch movement

  25. By Pivi on Jan 28, 2013

    In house or Outhouse….. it all depends on personal taste and being able to afford to purchase one. They’re all great watches.
    The video is a very educational for those who have interest in horology.
    Just enjoy what you have because everyone has equal time.

  26. By Mr watch on Feb 10, 2013

    I think,some of these ‘young’ Swiss watchmaking brands like Maurice Lacroix and Raymond Weil has fantastic quality bracelets on their watches. I have a RW Nabucco which has a solid thick bracelet and the centre of gravity is perfect with the body of the watch. The Lacroix sphere watch I have also has a quality polished bracelet. These young companies made it big comparatively late in history and do not compromise on value, like their old counterpart Swiss companies with a heritage of 100 years and beyond. These old companies watch bracelets are comparatively disappointing, and they only seem to thrive on their heritage alone and cut corners when it comes to bracelet. We know the ubiquity of the ETA movements and the pretentious caliber numbers given to them by these watch companies, but movements now coming from China are very exciting, and used in many different brands. I will definitely be switching. You know wat I mean!

  27. By toan duong on Feb 19, 2014

    I have 1 swiss watch I bought from ebay for $40. the brand is not well known : classique but since it’s cheap I am happy. I have 9 orients and am very happy with them.

  28. By Breitling watches on Feb 28, 2014

    Very interesting, thanks for sharing.

  29. By prince inem nnanna on May 22, 2014

    sir,
    i have heard about products and services but i want to know if someone want to do business with your company how can i start.
    thanks

  30. By Santo on Jul 18, 2014

    Isn’t that COSC, Brian?

  31. By Joe Tuvilla on Jul 24, 2014

    Regarding the number of jewels and watch movements. I have my own collection of watches and I observe that there are old 17 jewels japanese automatics outperforming (in time accuracy and quality wise) swiss 25 jewels automatics. I am just saying that there are some, am not generelizing. Thanks.

  32. By vaios on Oct 12, 2014

    An orient automatic is a true automatic whereas the eta or the miyota automatics are really semi automatics, that’s why you have to wind them from time to time because the movement of your arm is not sufficient to charge your watch. The orient is possibly the best fully automatic watch in the world and you dont have to wind them yourself. that’s why orient does not give you that option always. You get that option with the orient star, but you don’t really need it again. Once you get an orient you start questioning yourself why the hell did I pay so much for a swiss brand. Why? because we got sucked in by their marketing image they created. Now that’s see how much an eta movement costs by itself. I herd the cost is less than 50 dollars, so how much does it cost to put it in a metal case? Even if the metal case is pure gold how much do you think the precious metal costs 1000 dollars? Now that’s see the in house swiss story. You can do so much with a movement and when you compare the eta movement to any in house swiss the differences are minimal. It is often said that its like Japanese cars and European cars. that is unfair, watches tell time and they have to be valued differently, and most often the orient does better with their automatics. Once you get yourself an orient eminence with sapphire glass and a design that matches or betters the patek calatrava for 155 dollars you start wondering….

31 comments | Tell us what you think!