USA - Canada Latin America Oceania
31.6% 14.5% 2.7%
22.3% 12.1% 2.0%
45.2% 15.1% 0.2%
36.2% 7.1% 0.3%
Table-5, which lists all the countries to which the Swiss shipped a million or more watches in 1970, rounds out the exports pictures. As table-5 indicates, 11 countries imported the bulk-three quarters in unit terms and two-thirds in value terms of Swiss watch production. As the World's largest watch market, the United States was, quite naturally, number one in importance to the Swiss. Yet, as suggested by Table - 4, the Swiss share of the U.S. Market has been eroding steadily. In fact, in 1950, 99% of all watches imported into the United States were of Swiss origin; by 1970 this figures had dropped to around 70%. In the same period, the Swiss share of total watch consumption in the United States had declined from 50% to about 40%. Table - 5 Swiss Exports of Watches and Movements to Major Markets - 1970 United States Hong Kong United Kingdom Arabia West Germany Italy Spain Argentina Brazil Canada Mexico Japan
% of total units 27.4 14.2 8.7 4.8 4.1 3.7 3.6 2.2 2.1 1.9 1.6 1.4 Total : 75.7
% of total value 20.2 10.0 5.5 3.8 5.7 6.5 3.8 2.2 1.9 1.5 2.0 3.7 66.8
The number two export market for Switzerland in 1970, Hong Kong, was a recent arrival on the scene. One item largely accounted for the rapid emergence of Hong Kong as a Swiss customer. By 1970 almost 85% of all pin-lever movement (not finished pin-lever watches) made in Switzerland were destined for Hong Kong where they were cased and subsequently scattered over many for Eastern markets. Determining who actually controlled what part of the Hong Kong trade in 1970 was an almost impossible task. Several Swiss pin-lever manufacturers had assembly plants in Hong Kong, yet local interests were also involved in the business. About all that could be said was that Hong Kong had become an important channel through which Swiss pin-lever watches reached many overseas markets. One final point brought out in Table - 5 needs mentioning. Note that Japan, the second largest watchmaker, was not a major market for the Swiss. This fact has certainly had a bearing on how the Swiss have viewed the competitive problems facing their industry. Whereas, in any sort of contest among Swiss, Japanese, and U.S. Watchmakers, the Swiss could afford to give up their place in the Japanese market, they could not afford to see their hold on the U.S. market seriously jeopardized. As well shall see in a subsequent section, in 1970 the United States was also Japanese leading export market. It follows that, if the 1970s were to see a struggle for leadership in the world watch industry, the battle would take place principally in the U.S. market place. Fragmentation : the Swiss Industry's Main Problem One fact, mentioned at the beginning of the preceding section, is the key to the number one problem that faced Swiss watchmakers in 1970. The industry, which included around 1,000 different enterprises, was far more fragmented than that in any other leading watchmaking nation. To understand why this was so calls for a brief review of the development of watchmaking in Switzerland. Early Development The Swiss did not invent the watch. Over 300 years ago the rudimentary techniques of watchmaking were brought to Switzerland by Huguenots placing religious persecution in France. At first they settled around
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