Swatch Group’s plan to stop supplying rivals with key components threatens the "Swiss made" seal on which the industry rests and could force watchmakers to source from Asia or simply go out of business.
"It is clear that a tightening of the supply market coupled with the need to redefine the business model could turn a few brands to quick and cheap sourcing alternatives in East Asia," said Pierre Landolt, Chairman of the Sandoz Family Foundation, which is behind high-end watch brand Parmigiani Fleurier.
"Watchmaking is one of the few global markets where Switzerland enjoys a position of leader. And the label ‘Swiss made’ is an essential reason for this," he said.
Swatch Group said in December that it wanted to stop supplying the rest of the watch industry with important parts, broadening a move taken a few years ago to cut deliveries of watchmaking kits, also known as ebauches, from 2011 onwards.