Swiss watchmaking: what to do with the sub-3,000-franc segment?

The statistics from the Federation of the Swiss Watch Industry tell a two-curve story: export value remains at historically high levels, driven by the high end, while volumes are structurally declining. The Swiss watch under 3,000 francs is selling less and less. Competed against by the smartwatch on utility, by microbrands on value for money, it also bears production costs that Swiss-made requirements make hard to compress.

Faced with this, the temptation of full premiumisation is strong: move upmarket, target the wealthiest clientele, more resilient to cycles. This strategy has made several manufactures' fortunes. It does, however, contain a blind spot that the industry is beginning to measure.

Premiumisation works, until the day it impoverishes

Concentrating the offer on the very high end mechanically improves margins and protects against cyclical shocks: the clientele buying a 50,000-franc watch rides out recessions. But an industry that abandons its entry level also abandons its gateway. Tomorrow's collector rarely starts with a grand complication: they start with a first beautiful, accessible watch that bonds them to mechanical watchmaking.

If that first watch is no longer Swiss, it will be Japanese or German, and the attachment will build elsewhere. The risk of general premiumisation is not visible in this year's accounts: it will be readable in the client pyramid fifteen years from now.

Automate without disenchanting

Under 3,000 francs, survival depends on industrialisation: automated assembly, reliable standardised movements, longer production runs. The classic objection is that automation kills desirability. Watchmaking history suggests the opposite: what makes an entry-level watch desirable is not the hand that assembles it but the coherence of the product, the strength of the design and the legitimacy of the brand.

The enduring success of certain iconic lines produced in large series proves it: an industrial product can be iconic. The condition is to own the positioning rather than mimicking the codes of haute horlogerie. An entry-level watch that presents itself as an exceptional piece creates a dissonance that the client always ends up perceiving.

Our perspective: segment the industry, do not abandon it

The question facing houses is not 'should we choose between volume and prestige' but 'which brand in the portfolio carries which mission'. Groups with several brands can entrust the entry level to a dedicated brand, openly positioned as industrial, while the group's manufactures move upmarket. Independent houses must choose their camp and stick with it: the worst positioning is the in-between, too expensive for volume, not legitimate enough for prestige.

In both cases, preserving an entry point into Swiss mechanical watchmaking is in the collective interest of the industry. It is a subject that deserves to be treated as such, at the level of industry institutions as much as executive committees.

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