As the economic shock of US tariffs hits an already shaky luxury watch market, top executives at several Swiss watch manufacturers say they anticipate cutting output in 2025. CEOs of watch companies were already taking a cautious approach to production as the market slowed after a post-pandemic-era boom, even before the US unexpectedly announced a 31% tariff on Swiss goods during the Watches and Wonders salon in Geneva.
Following the decline in global stock markets and the hit to consumer morale from the US tariff plan, some people are now becoming cautious about a production pullback. Some luxury firms are embracing scarcity by making more intricate, finely crafted, and expensive timepieces in smaller quantities, accelerating a longer-term trend. This is partially due to the belief that consumers with more incomes will be more resilient to changes in the market.
Guido Terreni, CEO of Swiss watch firm Parmigiani Fleurier, displayed ultra-high-end items such as the new Toric Quantième Perpétuel dress watch at Watches and Wonders in Geneva. Only 50 of the perpetual calendar models, which retail for 85,000 CHF and 92,000 CHF, respectively, and are cased in rose gold or platinum, will be produced this year.
In an interview, Terreni stated, “The goal is not to enter the market with novelties because we are trying to restore that sense of scarcity.” He said, “We have what we launched this year, and we’re not going to do one piece more.”
Parmigiani, renowned for its delicate, beautiful, and discreet design language, has over 20% of its sales in the US. During the boom, which saw sales more than triple between 2020 and 2023, the brand experienced fast expansion. However, Parmigiani and others in the industry are returning to “building a little bit of scarcity around an industry that lost this in a very short period of time” as revenue declined in 2024, Terreni said.
Ulysse Nardin, a member of the Sowind Group, which also includes Girard Perregaux, introduced just one new watch at Watches and Wonders this year, adding to the latest volume of austerity. In an interview, Managing Director Matthieu Haverlan described the Diver Air as a featherweight (52 grams) yet sturdy (200 meters water resistant) skeletonized illustration of the brand’s core strength of technical innovation.
According to Haverlan, Ulysse Nardin produces less than 7,000 watches annually, and their average sales price has increased from less than 15,000 CHF five or six years ago to over 35,000 CHF. The brand’s message is that “Ulysse Nardin is not overloading me with too many watches,” manufacturing will probably decline even more. It demonstrates exclusivity. “It demonstrates focus,” Haverlain added.
Given the uncertainties and the persistent trend of declining volumes and rising prices, even the largest and most prosperous brands may have to make reductions. Morgan Stanley and LuxeConsult analysts estimate that since 2011, the total volume of the Swiss watch industry has almost halved.
According to research by Swiss bank Vontobel, Rolex, the market leader with over a million watches produced annually, now makes up almost 60% of Swiss watch exports for watches costing more than 3,000 CHF at wholesale, up from roughly 50% in 2019. With around one-third of sales, the Crown also controls the secondary market.
Vontobel claims that the average selling price of a new Rolex has increased to over 15,000 CHF. At the same time, Morgan Stanley predicts that the company’s production volume has slowed or perhaps decreased significantly, with volumes dropping by 2% in 2024—the first decline since 2009. In 2025, the bank anticipates further volume contraction.
Although Rolex does not publicly discuss its manufacturing volumes, it has disclosed intentions to expand capacity by constructing new production facilities in Bulle, in the Fribourg canton, which are anticipated to be operational by 2029.
Hermès’ watch segment has seen industry-leading revenue rises in recent years, with an average compound annual growth rate of 24% between 2019 and 2024, according to Vontobel. However, the shock tariff announcements and subsequent market and consumer uncertainties mean that “2025 is still a year in which the visibility is not there for watches,” said Laurent Dordet, CEO of Hermès Horloger, in an interview.
Even before the tariff announcement, the watchmaker saw scant signs of improvement in customer attitude in China, a significant market for the brand. The brand’s sales fell by around 4% in 2024 because it was overexposed in China and underexposed in the United States, where the market remained strong.
Hermès returned to Watches and Wonders this year with new versions of its Le Temps Suspendu complication (which allows the user to suspend timekeeping with a pusher and return to reality and the current time by pushing the same button again), as well as a 39 mm version of the Hermès Cut model line, which debuted last year.
Hermès produces between 60,000 and 70,000 watches per year, and Dordet believes the income contribution of sophisticated and high-horology timepieces will continue to expand as consumer perceptions of the brand shift. “It’s rising step by step to 30% to 40% of revenue,” he remarked. While volumes may remain unchanged or drop this year, the brand is expanding its production facilities in Noirmont, Switzerland, which will expand capacity and introduce new aspects of watch production by the end of 2027.
“It isn’t just about increasing capacity. It’s also for incorporating some strategies we don’t currently have,” Dordet explains. “It is supposed to cover the growth potential of the next 20 years.”
According to Co-Chief Executive Rolf Studer, whereas brands like Hermès, Ulysse Nardin, and Parmigiani focus on scarcity with more expensive, intricate, or creative timepieces, approachable companies like Oris concentrate on value.
The Hölstein, Switzerland-based independent watchmaker introduced a batch of colorful-dialed variants of their famous Big Crown Pointer Date model, which was made in 1938.
These included a Sellita-powered variant with a steel band priced at 2,000 CHF.
“You have to stay true to your brand, no matter what it is, and then you try to respond to trends, whether they are design-wise, size-wise, or price-wise,” Studer said in an interview.
“It’s very clear that customers feel betrayed by some brands’ pricing,” he explained.
The post-pandemic downturn has severely impacted Oris. 2024 was its worst year since the Global Financial Crisis in 2009, and, like Ulysse Nardin and numerous other Swiss watch companies, as well as a slew of component suppliers, it took use of Switzerland’s short-term employment program, which allows staff to be furloughed while keeping their jobs. The United States is the company’s primary market, and the uncertainty and distrust caused by recent trade policy decisions only worsen matters.
“We feel the uncertainty,” Studer explained. “In our industry, uncertainty is poison.”
Oris is not alone in facing the uncertainty generated by the market downturn and US tariff concerns. The major Swiss watch brands, distributors, and retailers are currently choosing how to bear tariff expenses if and when they are applied. Swiss government authorities also attempt to agree with the US to decrease or abolish the charges.
“The US government’s calculations are unclear to the Federal Council,” the Swiss government stated.
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