The Wall Street Journal reported that there is a great tide of change being initiated by Swatch Group, Richemont and Rolex.

The controversy is over the issue of how despite the law that requires watches that are described as "Swiss Made" need at least 50% of the value of a watch movement to be manufactured in Switzerland, many brands can circumvent the rule with less than 10% of the real value of a watch from Switzerland. This is because in practical terms the usual cost of mechanical movements consists of between 15-25% of the total value of the watch. So a brand could possibly use "Swiss Made" by the mere decoration of a automatic rotor as the value of the decoration either by machine or by hand would easily amount to over 50% of the value of the movement. This effectively means that the dials, hands, case, crystal, bracelet, strap, buckle, boxes and even the printing of the papers of any "Swiss Made" model could be made completely outside of Switzerland.

The proposal by the three large groups is that 60% of the value of the watch (quartz) must be created in Switzerland and 80% for mechanical watches. Many small manufacturers fear the change as it would mean either complete shut down of operations or moving the business completely overseas.

The Swiss watch industry needs this shake up to bring some sense of truth to its claims and standards. Swiss Made should mean just that and the customer should not be fooled to believe its a Swiss Made just by the brand, the location of its operating HQ when more than 3/4 of the parts are made from another country.

BMW make and assemble its Z4 cars in the US, Toyota Camrys in Thailand but they do not describe them as "German Made" or "Japanese Made". They honestly inform customers that they are assembled elsewhere.

The Swiss regulators need to bring truth in advertising and product description into play before all credibility and trust is lost. Once lost, trust is extremely hard to redeem.

Kudos to the Swatch Group, Richemont and Rolex for initiating this important return to honest practices and honest product description. Lets hope that everyone including those who preach for accurate description practice it.

Read the WSJ Article by clicking HERE.

- HT