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Swiss watch exports set a new record in 2008
Economy

Swiss watch exports set a new record in 2008

Monday, 23 February 2009
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Christophe Roulet
Editor-in-chief, HH Journal

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At CHF 17 billion, Swiss watch exports reached a new record level in 2008. Although the marked slowdown observed since October, a consequence of the current economic climate, continued into December, it made less of an impact than expected.

These were the figures everyone had been waiting for. Would it be happy faces or tears all round? Ultimately, the answer lies somewhere in between, as 2008 signs on as yet another record year for Swiss watch exports, and December proves to have been less of a disastrous month than forecast. As always, however, these figures shouldn’t be taken at face value. Exports and sales to end customers are not the same thing; nor do export figures take into account products that find their way into the “grey” markets when bona fide distribution channels are collapsing under the weight of their stocks. In the absence of more precise data, however, the only option is to work with the figures we have (as HH Magazine did when it published its forecast in issue 23).

© Federation of the Swiss Watch Industry FH
© Federation of the Swiss Watch Industry FH
The Asian locomotive

As the Federation of the Swiss Watch Industry (FH) reports, 2008 turned out to be another record year for the profession, which exported the equivalent of CHF 17 billion, an increase of 6.7% or CHF 1 billion. Matching this were exports of wristwatches whose value rose 7.2% to CHF 15.9 billion over 12 months. In volume terms, the industry has less to shout about as exports for the year inched forwards just 0.8% to 26.1 million units. Average price (ex-works) grew by 6.4% to CHF 608, with an even larger increase in the mechanical watch segment where average price gained 10.7%. As the FH observed, all materials contributed to this increase: “18k gold made an important contribution to the overall assessment. Precious metals generally, as well as plated timepieces, recorded the highest rates of annual variation. Bimetallic watches remained at an average level, while steel products recorded the most moderate increase with +1.9%.”

© Federation of the Swiss Watch Industry FH
© Federation of the Swiss Watch Industry FH

Continuing its analysis, the FH noted a variation in performance across the different price segments. Watches with an ex-works price of under CHF 200 stayed out of the red thanks to substantially higher volume sales. This contrasts with timepieces in the CHF 200 to 3,000 bracket. Only Fine Watches held firm. This segment now accounts for some 60% of total Swiss watch exports and gained some 20% in value terms over 2008. It is also the only segment to have stayed in the black over the last quarter. Turning to the markets, Hong Kong (+10.9%) left no doubt as to its position as the leading destination for Swiss watches, ahead of the United States and Japan which lost 3% and 4.5% respectively in 2008. China (+43.1%) moved up two places in the overall ranking and is now seventh, ahead of Singapore (+16.8%) and the United Arab Emirates (+27.6%). At +13.2%, Asia was therefore the main source of growth for the Swiss watch industry in 2008, well ahead of Europe which recorded a general slowdown in pace, ending 2008 at +3.6%.

Analysis for December

Performance for the year was nonetheless marred by figures for December. While avoiding the 15.4% slide recorded in November, exports still lost 7.6% at CHF 1.3 billion. The value of exported watches diminished in equal proportion. Once again, watches with an ex-works price above CHF 3,000 were the only segment to make any progress. They gained 3.1%, despite a 9.5% fall in the number of watches sold at export. Every other segment fell: entry-level watches were down 10% in volume terms and the mid-range segment (ex-works price of CHF 200-500) lost 20% in value terms. However, prestige watches (ex-works price of CHF 500-3,000) were by far the hardest-hit as they dropped 30% in value terms. A handful of countries did manage to add some brightness to a bleak picture, such as France (+7.2%), Italy (+16.1%) and Germany (+6.7%).

© Federation of the Swiss Watch Industry FH
© Federation of the Swiss Watch Industry FH

While figures such as these might dampen enthusiasm for the months to come, they haven’t shaken the industry into submission. Indeed: “This is a morose economic climate. Household confidence has taken a slide and share prices are on a steep downward gradient. In the realm of Fine Watchmaking, some are sounding the death knell of the golden years of the past. So is the mirage ready to fade? No more dreams? No more love at first sight? Does the hour hand tell us the time has come to take stock? Far from being submerged by this wave of panic, at Audemars Piguet our optimism and determination remain intact.” After the SIHH in January, both the Manufacture and its retail partners were ready to embrace the beginning of a year fraught with danger.

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