“The TAG Heuer 1888 Calibre should launch at end 2013”

A year ago, in January 2012, there was still a lot of uncertainty in the air. Already in December we’d observed something of a slowdown in China, which proved to be not a blip on the radar but a marked trend. Domestic demand in China has plummeted for products over 15,000 renminbi, which is roughly CHF 2,200. TAG Heuer is right in the segment that’s been hardest hit. Fortunately, China isn’t a particularly important market for us. On the other hand, anything under 10,000 renminbi (CHF 1,450) has continued to perform fairly well. Also, the Chinese are still travelling and buying more and more overseas.

The rest of Asia, Japan and Korea in particular, have performed extremely well, and not because of exchange-rate factors. Russia has also held up well, as has Europe with the one exception of Germany. We’ve seen b growth in the Middle East and Americas, with sales doubling in Brazil after we brought our prices down. We took the decision to cut our margins in Brazil, and in India where taxes are also unusually high. Ultimately we hope these taxes will come down too, which will make our extensive presence in these markets more profitable.

The market should grow in 2013 but probably not by as much as it did three years ago.

Absolutely. If the market grows by 25% there comes a point when production can’t keep pace. Industrial time isn’t the same as market time.

TAG Heuer has a well-balanced portfolio in terms of sales. We make 30% of our revenue in the Americas, 30% in Europe and the Middle East, and 40% in Asia. Most of our products are priced between CHF 2,000 and CHF 7,000, a segment other major brands are pulling out of.

It has indeed. Over the course of its existence, the Carrera has become a Manufacture watch. From its beginnings as a Valjoux chronograph movement with an outsourced case and dial, it has grown into a chronograph driven by the TAG Heuer 1887 calibre inside a Cortech case with an ArteCad dial, hence manufactured entirely in-house. It’s no coincidence that we’ve built our high-end segment around this iconic collection.

As we step up production of this calibre, it will equip the Carrera collection, then our best-selling Aquaracer line. Having said that, we intend keeping an entry-level Carrera with a Sellita SW500 movement. Except for these models, all new Carreras will be driven either by the Calibre 1887, the upcoming 1888, or the Zenith Calibre 36. Then there’s the high-end segment… Carrera’s fiftieth anniversary is a chance to train the spotlight on the 1887 Calibre, a quality chronograph movement that can be industrially manufactured at a reasonable cost. The reason we can now introduce the 1887 on such a wide scale is that we are able to produce large quantities of chronographs at competitive prices.

We launched the project a year ago, working from the ground up. Of course we can build on everything we learned when developing the 1887 and the Mikro calibres. Over four years, we’ve gained considerable all-round experience thanks to these two movement families. We’ve developed the 1888 as the ideal movement with a view to high-volume industrial production. We focused a lot of attention on assembly and on disassembly for maintenance. This means significantly less expenditure for the customer at the time of purchase and for servicing. All in all, the 1888 is a constructive development that we plan to introduce from end 2013, with an even spread of 1887 and 1888 calibres in a similar price range. Our high-end chronos will be covered by Dubois-Dépraz and Zenith movements, and by the Mikro calibre at the very high end of the market. For a more affordable segment, we intend maintaining significant quantities with the SW500 to gradually replace the Valjoux.