It has been revealed recently, that “Swiss made” watches may not be all that they seem. Brands carrying the Swiss label are highly marketable products and best sellers, which is one of the reasons Switzerland is regarded as the market leader in watches.

To qualify for the “Swiss made” label, the watch itself must be assembled in Switzerland and have at least 50% of its components locally made. However, it has come to light that Seiko Instruments Incorporated, who manufactures Seiko watches, has been providing “the intellectual property for its first in-house movement” to Tag Heuer.

The temptation for some manufactures is that they can buy cheaper mechanisms, such as, dials, hands and movements in countries like China or from Seiko watches in Japan for five times cheaper than in Switzerland.

In Switzerland, 80% of watch movements are supplied by Swatch Group’s manufacturing unit ETA, who until recently supplied Tag Heuer. Chief executive Nick Hayek accuses some watch makers “of being hollow brands that invest little in the craft and spend millions on glamorous ad campaigns”. Whether “Swiss made” watches weather the current global economic crisis and still remain on top, remains to be seen.