Luxury watchmaking is changing and becoming more like two related but much larger businesses – automobiles and fashion.
Historically, watchmaking was a cottage industry, because it is relatively simple, even today, to make watch components or very nearly an entire watch with a home workshop.
That is why small-scale independent watchmakers still exist, making a few dozen timepieces a year with a small room’s worth of antiquated equipment.
Making cars, in contrast, was a massive industrial endeavour from the start. Henry Ford pioneered it, and now the whole industry operates on the same model, which essentially is about making more and more of the same.
The economics and nature of producing automobiles mean it is not feasible to make them on a small scale, except at very, very high prices, which is what exotic carmaker Pagani does.
So, most cars in the world are made by one of the big carmaking conglomerates. In 2013, some two-thirds of the world’s motor vehicles came from the 10 largest carmakers. And all the big carmakers have ambitions to get bigger – Fiat, for example, completed its acquisition of Chrysler last year.
Similarly, the watch industry now revolves around the three major groups – The Swatch Group, Richemont and Rolex – plus a handful of independent, family-owned brands large enough to go solo, like Patek Philippe and Audemars Piguet.
Small brands are being squeezed from both ends of the supply chain. Many of the components suppliers these brands buy from are being acquired by the large brands or groups, which inevitably decide to reduce or terminate supply to independent brands since they are competition.
At the other end of the supply chain, retailers are being pressured by the big brands, who by virtue of their huge scale and desirability have leverage over retailers. The upshot is all too familiar: Each time a major watch store undergoes a renovation, the big brands end up with larger and more prominent displays, while small brands are either relegated to the back of the store or disappear altogether.
That is a shame because small brands tend to produce more interesting watches. Look at MB&F or Greubel Forsey or Nomos Glashutte, that make unusual watches that big brands cannot. Because major watchmakers seek economies of scale, they often resort to making the least cutting-edge watch so as to appeal to the greatest number of people.
And that is why the watch industry is evolving towards a model similar to that of the fashion industry, with several collections presented during the year. Whereas in the past watch brands unveiled their new watches once a year at either of the two major trade fairs – Baselworld or the Salon International de la Haute Horlogerie – they now show off new wares several times a year.
That is driven by the need to gain exposure in magazines and newspapers, and on the Internet. New products are what make headlines, so watchmakers have responded in the most obvious way – by continually creating new products.
But because it is nigh impossible to create a genuinely new product – meaning an entirely new model or movement – several times a year, watchmakers generate variations on a theme such as new dial colours or different fonts for the numerals instead.
The diversity and art in watchmaking will diminish as the industry continues to evolve. But as long as watch buyers remain discerning and demand something different and special, there will always be a place for small, independent watchmakers.