ZURICH, Oct 9\u00a0\u2014\u00a0India and Mexico could become new drivers of growth for the Swiss watch industry, which has been clobbered by US tariffs and slumping demand in China, top audit firm Deloitte said Wednesday.<\/p>\n
The emblematic Swiss industry \u201cis navigating one of the most complex periods in recent memory\u201d, the professional services giant said in the 11th Deloitte Swiss Watch Industry Study.<\/p>\n
Watchmaking, the wealthy Alpine country\u2019s third-largest export sector, was rocked when the United States\u2014its largest market\u2014imposed 39-percent tariffs on Swiss products in August.<\/p>\n
Furthermore, exports to mainland China\u2014the other major market for Swiss watch manufacturers\u2014continue to decline, with demand hit by youth unemployment and turbulence in the real estate market.<\/p>\n
According to figures from the Federation of the Swiss Watch Industry (FH), exports to the United States last year amounted to 4.4 billion Swiss francs (US$5.5 billion) — up five per cent on 2023.<\/p>\n
Exports to mainland China were at two billion francs\u2014down 26 per cent.<\/p>\n
Karine Szegedi, Deloitte Switzerland\u2019s consumer, luxury and fashion chief, said the industry should seize opportunities in other countries where growth is booming.<\/p>\n
\u201cTapping into new growth regions is crucial as a way of cushioning declines in established markets,\u201d she said.<\/p>\n
\u201cCountries like India and Mexico are a source of young, dynamic customers. These customers are open to innovations, giving the Swiss watch industry the opportunity to expand its global presence in the long term.\u201d<\/p>\n
New watch markets\u00a0<\/p>\n
Deloitte had already identified India as a market with high potential for watchmakers in its 2023 study.<\/p>\n
Since then, Switzerland has signed a free-trade agreement (FTA) with India, which came into force on October 1, expected to facilitate the Swiss watchmaking industry\u2019s access to India\u2019s growing middle class.<\/p>\n
This year\u2019s study noted the \u201cstrong domestic demand, rising affluence, and active investment in retail infrastructure\u201d in India.<\/p>\n
The study also shone a light on Mexico\u2014a country Switzerland signed an FTA with in 2021.<\/p>\n
Since then, watch exports to Mexico have increased fivefold, with the country establishing itself as the leading market in Latin America.<\/p>\n
Deloitte said watch enthusiasm in Mexico was being driven by social media.<\/p>\n
India, however, remains the industry\u2019s fastest-growing major market.<\/p>\n
FH figures showed Swiss watch exports to India were up 25 percent last year at 274 million francs, while exports to Mexico were up 16 percent last year at 337 million francs.<\/p>\n
But while growth in these countries offers promising prospects, rising sales will not be enough to entirely offset the impact of US tariffs and the slump in exports to China, Deloitte said.<\/p>\n
Mexico was the Swiss watch industry\u2019s 15th-biggest market last year, and India the 21st. \u2014 AFP<\/p>\n
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