Nivarox's hairspring monopoly
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  1. #1
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    Nivarox's hairspring monopoly

    The hairspring of a mechanical movement is perhaps the most critical component, without it a watch would stop immediately. Yet this two milligram component is ridiculously difficult to make with consistent quality repeated millions of times, the composition of hairsprings are also a closely guarded metallurgical mystery. At present, over 95% of the Swiss watch industry (and many non-Swiss ones) rely on one manufacturer for their hairsprings -Nivarox FAR (a subsidiary of Swatch group). The majority of 'in-house' movements (even at the Patek Philippe level) infact use Nivarox hairsprings (and some Nivarox mainsprings as well), and most watch brands do not have the kind of equipment, R&D or time to develop their own. There are other companies that supply hairsprings such as Concepto, Altokapa and a small number of other German companies, but the price of such hairsprings are over 10 times the price and just not economically feasible since they all lack the decades of expertise Nivarox possesses and may even be of lower quality as well.

    We are all familiar with the hullabaloo surrounding ETA (Swatch)'s decision to limit ebauches supplies to watchmakers outside the group around 2011 and a lot of watch brands that used ETA movements have switched to other alternatives such as Sellita or Soprod offerings and many have conceded that the crisis is over. But what is often skimmed over is the similar decision to reduce movement parts supply(such as hairsprings, mainsprings, shock absorbers etc). This is a far bigger problem, especially since even the Sellita 'Clones' utilize hairsprings from Nivarox. In response to that i know that TagHeuer has decided to switch over to Seiko (which raises questions about the statement Swiss made), Federique Constant (and 9 other 'in house' brands) have initiated legal action surrounding Comco's (Swiss anti-trust regulator) investigations over the legality of such reductions. And Sellita has temporarily extended delivery contracts with Nivarox, despite a 20% reduction in supply just last year. The future looks bleak, the only options at this point (of the near future) would be to use much more expensive German alternatives or to use sources from Asia, or to persuade vertically integrated watch companies like Rolex to provide their hairsprings, which is extremely unlikely.

    Is this Swatch's way of saying(to practically all except the highest end watch brands) if you want to survive as a watch company build your own friggin parts? Should people have seen this coming or have they simply compromised on a simpler and lazier solution to pocket more profit? But such R&D is out of the reach of many, especially one of my favourite - Nomos, which happens to use ETA hairspring, mainspring and incabloc shock absorber...

    EDIT: Just for perspecive, Nivarox FAR's hairsprings are around 10 dollars a piece, similar German counterparts are nearly 100 dollars, and will likely double the cost of a movement using them. I know the discussion will likely turn to Japanese and Chinese manufactures but think again, decades ago 100% of a Swiss made watch was made in Switzerland, that situation has changed greatly and many parts are now outsourced and only the final assembly is done in Switzerland, to comply with Swiss law. Thus far, the most important parts of a watch, the mainspring, hairspring and balance wheel are made in Switzerland but with that set to change, where does the outsourcing chain end? Why not just abolish 'Swiss made' all together?
    Last edited by yifu; November 1st, 2013 at 10:39.
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  2. #2
    Member RejZoR's Avatar
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    Re: Nivarox's hairspring monopoly

    Seiko and Citizen are one of the largest makers of mehcanical components, including hairsprings. And i think Sea-Gull is also making their entire mechanisms themselves. So, there is still selection and all 3 have loads of experience since they are also one of the biggest watchmakers in the world without being in any kind of group (like Swatch which covers many "smaller" Swiss watchmakers).

    As for the concern over "Swiss Made" if the watch is using Seiko's balance spring, does it matter? Cars are no less German even if they are using Slovenian components and i know we do produce many of them. So, one spring shouldn't affect the product origin as a whole because of that alone.
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    Re: Nivarox's hairspring monopoly

    I guess it's more of a matter of principle, considering the fact that even Patek Philippe uses Nivarox hairsprings, sourcing an Asian component may have a negative effect on perception, especially in this world where everything is globalised and high end watch manufacture are one of the few things can be vertically integrated.

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    Member RejZoR's Avatar
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    Re: Nivarox's hairspring monopoly

    Would it? People don't mind "Made in Japan" components in their high end devices or machines. In fact Japanese are highly praised for their quality in that regard. So why should Swiss watchmakers be "ashamed" of it? Because "Swiss" means precision? For me, so does "Japanese". Hell, Sea-Gull went so far they make nothing but mechanical movements and watches. Most of swiss also make quartz watches, but not Sea-Gull. And it's quite similar with Orient. Sure they also have other movements, but their main focus are mechanical movements. So, bottom line, Swiss aren't the only ones making watches and components for them.

    If i remember correctly, Citizen bought some Swiss company for this exact reason, to enter Swiss components market through Swiss firm. But we all know where Citizen is really from (hint: Japan).
    It doesn't matter how much the watch costs, it only matters if it makes your heart tick.

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    Re: Nivarox's hairspring monopoly

    Quote Originally Posted by RejZoR View Post
    Would it? People don't mind "Made in Japan" components in their high end devices or machines. In fact Japanese are highly praised for their quality in that regard. So why should Swiss watchmakers be "ashamed" of it? Because "Swiss" means precision? For me, so does "Japanese". Hell, Sea-Gull went so far they make nothing but mechanical movements and watches. Most of swiss also make quartz watches, but not Sea-Gull. And it's quite similar with Orient. Sure they also have other movements, but their main focus are mechanical movements. So, bottom line, Swiss aren't the only ones making watches and components for them.

    If i remember correctly, Citizen bought some Swiss company for this exact reason, to enter Swiss components market through Swiss firm. But we all know where Citizen is really from (hint: Japan).
    The public think Swiss watches are the best, along with Italian leather, English shoes, American hamburgers, Argentinian steak...not all true, but nonetheless.
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    Re: Nivarox's hairspring monopoly

    I could see how Citizen might quickly fill up the gap if it transfers its hairspring technology to its swiss subsidiaries La Joux Perret or Prototec.
    The bigger groups will probably overcome this, Montblanc (Richemeont) is capable of producing their own and it would be a matter of ramping up production for the rest of the brands within the group and Rolex has their own parachrom blu.

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    Re: Nivarox's hairspring monopoly

    Nature and business abhor a vacuum. Somebody will step in.

    Besides, Sietz has an even firmer stranglehold on the jewels in your watch.
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    Moderator Public Forum John MS's Avatar
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    Re: Nivarox's hairspring monopoly

    Quote Originally Posted by RejZoR View Post
    Seiko and Citizen are one of the largest makers of mehcanical components, including hairsprings. And i think Sea-Gull is also making their entire mechanisms themselves. So, there is still selection and all 3 have loads of experience since they are also one of the biggest watchmakers in the world without being in any kind of group (like Swatch which covers many "smaller" Swiss watchmakers).

    As for the concern over "Swiss Made" if the watch is using Seiko's balance spring, does it matter? Cars are no less German even if they are using Slovenian components and i know we do produce many of them. So, one spring shouldn't affect the product origin as a whole because of that alone.
    Yes I agree. If Swatch decides to supply springs and other parts and movements to only house brands I see that as an opportunity for manufacturers in Japan, China, etc., to exploit. And they are. I really don't care what the countries of origin are for hairsprings and all other watch parts. What I care about is the reputation of the watch company for designing, producing and supporting reliable good quality watches. If some or all the parts are made by contacted suppliers in a variety of countries it is no big deal as long as the watch company has good quality controls.
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    Re: Nivarox's hairspring monopoly

    I'll admit first off that I'm thoroughly uninformed of the "big picture" view of this situation, but in my limited experience of situations like this, the only time a company that is actually doing fine financially seeks to REDUCE production like this is to create more exclusivity. This, of course, drives profits higher (if it is done correctly) and forces the competition to change and adapt -- all of which would appear to be truthful in this scenario. It kind of stinks in my opinion, but look at how often remarks are made about "Swiss" not meaning what it used to...the powers that be don't like that. They just want to reclaim that "exclusivity", if not quality (because there are so many quality non-Swiss watch companies nowdays), and that perception that they are somehow different. Whatever, all I know is the price of everything is probably about to go up, Swiss, microbrands, non-Swiss, etc, so I better get my collection where I want it sooner as opposed to later or fully embrace the joys of quartz and just be content with the few automatics I already have...lol.

    I could be wrong on some of this stuff, so this post won't come with my usual 100% satisfaction guarantee.
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    Re: Nivarox's hairspring monopoly

    Quote Originally Posted by John MS View Post
    I really don't care what the countries of origin are for hairsprings and all other watch parts. What I care about is the reputation of the watch company for designing, producing and supporting reliable good quality watches. If some or all the parts are made by contacted suppliers in a variety of countries it is no big deal as long as the watch company has good quality controls.
    Not everybody who's spending thousands on a watch would agree with you. Collectors are a minority of the watch buying population.

    Quote Originally Posted by sirgilbert357 View Post
    I'll admit first off that I'm thoroughly uninformed of the "big picture" view of this situation, but in my limited experience of situations like this, the only time a company that is actually doing fine financially seeks to REDUCE production like this is to create more exclusivity.
    Correct - and that's good business. If the higher margin offsets the loss in units sold then it worked perfectly. Less overhead because of less employees, less materials, less packing, less returns, etc.

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