Swatch Raises Mid-Range Competition With Cheap Automatic Watches

Swatch Group AG (UHR), the biggest maker of Swiss watches, is increasing pressure on rivals by introducing so-called automatic timepieces under its namesake brand at a fraction of the prices offered by many competitors.

The new line, called the Sistem51, will go on sale in October, and prices for most models will be at the lower end of a 100 Swiss franc ($106) to 200 franc range, Chief Executive Officer Nick Hayek said at a press conference in Basel today.

Automatic watches work without batteries as they gather energy from movements of the wearer’s wrist. The mechanism that makes the Sistem51 run has 51 components, while most automatic watches have more than 100 and cost thousands of dollars. This is the cheapest automatic watch the Swatch label has designed.

“Strategically it is keenly priced, which puts some pressure on those offering automatic watches in price points of $1,000,” said Jon Cox, an analyst at Kepler Capital Markets in Zurich. It also shows that from a technical and efficiency perspective the company is a class above everyone else in terms of mass production of Swiss-made watches, he said.

The Sistem51 has a power reserve of 90 hours, meaning that it will keep running for that long even if it’s not moving on a wearer’s wrist. That’s more than some luxury automatic watches.

This is the first time the Biel-based company, which owns the Omega and Breguet luxury watch brands, has showcased its namesake brand of less expensive plastic timepieces at the Baselworld trade fair.

To contact the reporter on this story: Thomas Mulier in Basel at tmulier@bloomberg.net

To contact the editor responsible for this story: Celeste Perri at cperri@bloomberg.net

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