Watch Industry Association President looks to the future with optimism
Published: Thursday, Jun 27th 2024, 12:30
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The Swiss watch industry is facing headwinds after a record year in 2023. Demand for luxury goods is declining, particularly in the important Chinese market. However, Yves Bugmann, President of the Federation of the Swiss Watch Industry (FH), remains optimistic about the future.
"I am very confident about the future of the Swiss watch industry. The Swiss watch is a very beautiful product that arouses emotions. And we are very well represented in all price categories," said Bugmann in an interview with the news agency AWP on Thursday on the fringes of the FH General Assembly.
However, in terms of export figures, things are no longer going well for watch manufacturers. After the industry recovered well from the coronavirus shock and exported more watches abroad than ever before last year (26.7 billion Swiss francs), exports fell by 2.5% in the first five months of the current year.
The decline was due to the situation in China and Hong Kong, explained Bugmann. The economic situation there had deteriorated. The worsening of the real estate crisis, the slump in consumption and youth unemployment had resulted in a marked decline in spending. In addition, business was very good in 2023 and the comparative figures were therefore high.
"All of this has a direct impact on watch exports," Bugmann continued. It is almost impossible to predict how exports of Swiss timepieces will develop. "Exports are developing very differently in the individual months. Nevertheless, we assume that the situation will not change abruptly for the rest of the year, neither upwards nor downwards."
Market opportunities in India
While watch exports to China (-18%) and Hong Kong (-19%) fell sharply in the first five months, the USA, the largest sales market, remained stable with an increase of 3% and markets such as South Korea, Mexico and India even recorded double-digit percentage growth.
Bugmann is convinced that India still offers "huge" potential for the Swiss watch industry. One driver for this is the free trade agreement recently concluded with India. But Bugmann also sees opportunities for the watch industry with regard to the further development of the agreement with China. Especially if import duties on watches can be reduced further.
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