Why the ‘Swiss Made’ Mark on Your Watch Doesn’t Mean What You Think It Means
No other industry is as strongly associated with one nation as watchmaking is with Switzerland. Despite elite timepieces being produced in several other countries, no one uses “like a German watch” or “like a Japanese watch” to indicate some impeccable alchemy of precision, craftsmanship, and reliability; the expression is always “like a Swiss watch.” It’s a connection that germinated in the late 19th century, when Geneva began to dominate European watchmaking, and by the end of World War II, Switzerland had become Europe’s unchallenged horological capital—a status it continues to enjoy today.
The Swiss, obviously, want to both protect and promote this advantage while also turning a profit, and those dueling priorities are evident in the country’s approach to the Swiss Made stamp, which simultaneously mandates tight labeling restrictions and provides companies with a high level of freedom to manufacture outside the country. The modern rules date to 1971, when the Federal Assembly of the Swiss Confederation approved a new section of trademark law governing the watch industry, the Ordinance on the Use of “Switzerland” or “Swiss” for Watches. It stipulated that a minimum of 60 percent of the manufacturing costs of a watch’s internal workings—the movement—must be spent in the country in order for it to carry the Swiss designation. In 2017, the regulation was amended to mandate instead that 60 percent of the overall manufacturing costs (excluding the bracelet or strap) plus 100 percent of technical-development expenditure be spent in Switzerland.
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On the surface, the 2017 changes appear to make the Swiss Made label harder to attain. But closer inspection reveals an abundance of loopholes that have cleared the way for more, not less, foreign involvement. For example, the law dictates that a mechanical watch’s movement must be “made in Switzerland,” but its definition of such stipulates only that it’s partially assembled in the country, not necessarily manufactured there. The same section of the law states that the movement must be “cased up” in Switzerland and that “final inspection of the watch is conducted by the manufacturer in Switzerland,” but neither of these clauses mandates that manufacturing takes place in the country. Even the broader 60 percent rule can be adjusted if “an international treaty ensures that, as a result of close industrial cooperation, foreign and Swiss constituent parts are equivalent in quality”—and, further complicating matters, only half the cost of the movement’s parts in that scenario must still be spent in Switzerland. These percentages are dizzying, but they add up to a great deal of latitude: For example, when sourcing movement components from China, with which Switzerland set a zero percent import fee via its 2014 free-trade agreement, quite nearly an entire Swiss watch could be manufactured in China should just one relatively pricey Swiss component—say, a balance wheel—find its way into the movement and 60 percent of the total manufacturing costs be spent domestically on minor assembly and inspection. Given the differentials in labor and materials costs between the two countries, it’s not difficult to imagine that such a scenario could play out while a company still technically adheres to the law.
It’s disingenuous to say something is made somewhere when it isn’t.
Further confusion is born from the term manufacture, the French translation of which is more nuanced than our relatively constrained English definition, encompassing looser concepts such as invention, assembly, and fabrication. For example, Romain Marietta, chief products officer at Zenith, describes his Swiss company’s protocols thus: “We develop, create, and invent the entire movement in-house, and what’s more, we manufacture it in-house,” he says, before adding that “we also buy components, a bit of the movement, because we don’t manufacture everything” and going on to explain that “of course, there are things that have to come from somewhere other than Switzerland.” To many outside the industry, that may sound like doublespeak, but it’s accurate both in the French sense of the term and under the puzzlingly complex law governing so-called Swissness.
Consider the gear train, the array of interlocking gears that move the hands to tell time and are typically the most intricate part of a movement. According to the labeling law, a watch with a gear train manufactured and assembled outside Switzerland can still be labeled Swiss Made provided the mechanism was first designed and later inspected and physically screwed into the movement domestically. Given the mechanical and often aesthetic importance of the gear train to a luxury watch, this technicality has raised eyebrows among some enthusiasts.
“To me, that’s not Swiss Made,” says David Flett, an avid collector, historian, and skilled watch mechanic. “It’s not made in Switzerland or by Swiss people. Why isn’t it ‘assembled in’ Switzerland, which is clear, definitive, and used in other industries [around the world]? It just feels slimy.”
Yet another amendment allows for foreign manufacturing of parts made from comparatively new materials such as carbon fiber and high-tech ceramic. Despite the relative scarcity of these substances in Switzerland, they’re increasingly common in Swiss watches, especially for cases and bezels.
“I think the dream, or the kind of ‘Swiss’ way of selling, is a nice little film where you’re in the mountains, and there’s a watchmaker in a beautiful setting, and he’s just working on his watch, and it’s all handmade,” says Stéphane Waser, managing director of the mid-tier Swiss brand Maurice Lacroix. “The more people get into watches, the more they start to get into what’s mechanical and [how it’s] manufactured.”
Not everyone likes what they find when they go digging. Patrick Neal, a studious collector of timepieces from Rolex, Jaeger-LeCoultre, and IWC, tells Robb Report he felt “duped” and “lied to” by the ubiquitous Swiss Made description. “It’s disingenuous to say something is made somewhere when it isn’t,” he says. Some industry leaders likewise wonder whether the Swiss Made label has begun to erode the very trust it was intended to secure, but few if any brands are actively clarifying their practices in marketing materials.
Laurent Lecamp, the managing director of watches for Montblanc, recalls a study by the Swiss watch industry that showed “if you have two watches that look exactly the same, but one with ‘Swiss Made’ and one without, the client is willing to pay twice more for the ‘Swiss Made’ one.” A national narrative, in other words, is crucial to a Swiss watch company’s bottom line—Lecamp, for one, insists the brand’s timepieces are “100 percent Swiss Made”—but it comes at a hefty price. According to the Economic Research Institute, the average annual salary of a Swiss machine operator is just over $75,000, compared to about $15,000 in China or $6,200 in India. Energy costs, driven by the E.U.’s stringent limitations on carbon emissions, are likewise high, as are prices for raw materials and taxes. Marietta, of Zenith, puts it plainly: “If you have everything manufactured in Switzerland, the watches will always be more and more expensive in terms of selling price at the end.”
At the most rarefied level of Swiss watchmaking, however, where gifted individuals work alone or with only an assistant or two to craft timepieces largely by hand, questions about foreign manufacturing may be moot. Today’s darling of independent watchmaking, Rexhep Rexhepi, runs the Akrivia studio in Geneva that professes to produce its watches entirely in-house, and Philippe Dufour, widely considered the greatest living watchmaker, builds timepieces from scratch in his decidedly old-school workshop in Le Solliat, a small village in the Vallée de Joux. Creators like these may be living out the ideal of the lone Swiss watchmaker, but they represent a tiny sliver of the industry and produce a mere handful of pieces annually, all allocated years in advance to elite collectors willing to pay for such exclusivity. These exceptions aside, the vast majority of Swiss watch brands engage in far more industrialized production and, with profit margins in mind, must at least consider the possibility of outsourcing beyond the nation’s borders.
Switzerland has been shifting production to Asia since the rise of industrialized manufacturing, during the electronic-watch boom of the 1970s, but there remains an institutional opacity about which components are made where, including contractual stipulations for brokers who liaise between Swiss brands and Asian factories that force them to conceal which parts they source for which clients. It makes it nearly impossible to determine which elements of any specific Swiss watch might be made in China, India, Thailand, or elsewhere in Asia.
What’s abundantly clear is that Asian manufacturers have become juggernauts in the global watch industry. They’re capable of making all parts of a watch—indeed, the whole watch, if necessary—often with a very fine quality that, as the Swiss Made law requires, meets the standards of many Swiss brands. Still, companies that trade on the Swiss Made label are not trumpeting the Asia connection, though some are more open than others about using the continent’s factories.
“Sometimes we do dials in Switzerland or India or Thailand or China,” says Niels Eggerding, managing director of the accessibly priced Swiss watch brand Frederique Constant, who confirms that the company sources cases from Asia and employs factories across the continent. The brand offers a skeletonized perpetual calendar watch for $12,400 and a tourbillon-powered one for $15,700, both of which grabbed headlines for making these high complications available at unprecedentedly low prices. The key, he says, is to stay mindful of the 40-60 cost split and deliver quality the customer can see. If “the percentage is going to be squeezed,” he suggests, one might “take a dial from Switzerland to make sure [the] percentage is respected.” Eggerding also believes the E.U.’s current push for sustainable manufacturing practices could be a rude awakening for the industry, particularly if it produces laws that require brands to be fully transparent about where they manufacture. Such legislation, he says, would expose the ways in which many brands “lie” about their processes.
Waser, of Maurice Lacroix, also speaks frankly on the topic. “I would say below 5,000 Swiss francs, below 10,000 Swiss francs [roughly $5,500 to $11,000], it is impossible today, with the cost of labor, the cost of goods, to be 100 percent Swiss-made. There are very few watch brands who are doing this.” Meanwhile, Eggerding insists that Asia is “super top-notch” when it comes to producing cases, bracelets, and dials at scale in a way that Switzerland can’t always match. “They’re specialized with a big factory, big machines to do this,” he says. Based on his time in Asian manufacturing facilities, he also claims that they’re par for the course among Swiss brands that produce millions of watches per year, noting that he has seen cases in Asian factories that appear to be from other Swiss brands, including Omega, which is owned by the Swatch Group. “Everything is just open to have a look at it,” he says.
Swatch Group’s Marc A. Hayek, CEO of Blancpain as well as president of that brand and Breguet, Glashütte Original, and Jaquet Droz—and a member of the corporate board of directors, which also oversees Omega—rejects the claim. “There are no Omega cases made in [Asia] that I know of. Omega is in Tessin and the Jura,” he says, noting that the Swatch Group would be very interested to know where the cases were seen, as there are “quite a lot of high-end copies that we’re fighting, so I am not excluding this [possibility].”
Indeed, high-quality reproductions are a problem for the entire Swiss watch industry; Walter von Känel, former CEO of Longines, once said that “fighting the bandits” was his third-most-pressing concern after manufacturing and sales. But they also serve as a calling card for the current caliber of industrialized Asian watchmaking, particularly “super fakes” that conceivably could have been made on identical machinery—and could in some instances be described as unauthorized rather than fake but are entering the marketplace without ever passing through Switzerland. On the flip side, it’s nearly impossible for Asia’s industrial manufacturers to convincingly replicate elite works of high horology that require countless hours of hand-finishing via a series of traditional crafting techniques that evolved over centuries in Switzerland. But even that doesn’t discount the possibility of a part, or parts, being produced outside the country and then finished by hand back home.
The upshot for watch companies is that there exists a vast continuum of manufacturing paradigms set up to neatly deliver a Swiss Made timepiece at various price points. For the consumer, things are less clear. A number of experts interviewed for this piece speculated price floors below which a Swiss Made watch would require some sort of foreign manufacturing component—$3,000, $5,000, $10,000 were all suggested—but given the vagaries of the industry, there’s no clear line of demarcation that could possibly cut across all brands. If you want to know whether your Swiss Made watch was made entirely in Switzerland from start to finish, your best bet is basically just a rule of thumb: The higher the price, and the lower the annual production, the better the odds.
Truly elite watchmakers go beyond Swiss Made by signaling other credentials. Patek Philippe and Vacheron Constantin push the coveted Geneva Seal—guaranteeing that high-level finishing and decoration, among other things, are executed in the canton of Geneva—found on their watch movements, and Chopard uses the Qualité Fleurier certification, which also encompasses a Chronofiable aging test and other rigorous standards.
The majority of people who buy a Swiss Made watch have no idea what ‘Swiss Made’ means.
I don’t think that’s fair.
Still, Audemars Piguet CEO Ilaria Resta finds the broader Swiss Made terminology valuable, calling it “a testament to the quality, precision, and craftsmanship that have been perfected for centuries.” Even one of Swiss watchmaking’s most storied houses must look outside the country’s borders to meet demand for the roughly 50,000 watches it produces annually, if only for a minimal supply of parts. “Today, over 96 percent of our watch components are sourced from Swiss suppliers and manufactured in Switzerland,” she says.
Guido Terreni, CEO of Parmigiani Fleurier, asserts that the Swiss Made laws are beneficial for companies churning out millions of watches every year but less helpful for manufacturers such as his, which produces fewer than 3,000 timepieces annually, sources everything from Swiss suppliers, and assembles it all in the municipality of Fleurier. He calls the allowances “a bit unfair for those brands that did everything” in Switzerland and says more transparency would help consumers better understand what they’re buying. “There are clients who are discerning, who are curious about how things are done.”
“I think we should be even more transparent, even with Swiss Made,” agrees Yvan Arpa, founder and CEO of Geneva’s avant-garde ArtyA Watches. “We have to be authentic, we have to explain.” ArtyA produces complicated watches in Switzerland priced as high as $500,000, but Arpa also owns a more budget-friendly company called Black Belt Watch aimed at martial artists. The higher end, priced from about $3,300 to $8,600, is labeled Swiss Made, but a collection that retails from $160 to $600 carries Made in China on the case in order “to show the difference in quality, craftsmanship, and price,” he says.
Perhaps no one is as opposed to the current Swiss Made labeling practices as Edouard Meylan, CEO of H. Moser & Cie., which assembles and finishes about 4,000 watches by hand per year in Schaffhausen, produces its own hairsprings—a rare feat—and is known for the high quality of its in-house movements. In 2017, when the laws were amended, Meylan removed “Swiss Made” from the dials of all Moser watches as an act of protest, asserting that the term had become meaningless, and in April of that year the company released a one-off watch cased in carbonized Swiss cheese. The point was not subtle.
“I don’t think our industry and Switzerland in general did a good job in explaining the criteria for Swiss Made, making people believe that a Swiss Made watch is 100 percent made in Switzerland,” Meylan says now. “The majority of people who buy a Swiss Made watch have no idea what ‘Swiss Made’ means,” he says, adding, “I don’t think that’s fair.” He notes that a component could be made in Asia, and yet, “if somebody takes it, unpacks it, takes a file, and just goes like this”—he makes a quick hand gesture—“then, ‘Oh, it’s Swiss Made.’ ”
Recalling that it was only after World War II that the Swiss truly dominated watchmaking, and taking into account accelerating globalization alongside the rapid increase in manufacturing quality coming out of Asia, Meylan wonders if “maybe China will be the next Switzerland.”
Perhaps. But in the meantime, the situation is in flux, the industry is misaligned, and consumers are confused. Or are they? Watch collectors are a savvy lot, by and large, and some are both happy to invest in the romance and hip to the realities of modern watchmaking.
“You’re buying a story, right?” says Hong Kong–based financier Lung Lung Thun, who counts a frosted Audemars Piguet Royal Oak Openworked model, a Patek Philippe World Timer, and multiple Richard Mille watches in her collection. She notes that her fellow aficionados in Hong Kong similarly prize the Swiss Made label, despite being fully aware, as she is, that some of the timepieces in their collections were at least partially produced in Asia. “I know what I’m paying for—it’s a romantic feeling,” she says. “You’re paying for this idea that someone sat there and made it in Switzerland.”
Asked how she believes both sides of that story, she laughs and says, “Oh, I make myself believe it.”
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