ETIENNE DE GRAMONT IS THE MANAGING DIRECTOR OF IWC FOR THE ASIA PACIFIC REGION. WE HAD A CHANCE TO MEET UP WITH HIM TO TALK ABOUT THE ASIAN MARKET, THE PARTNERSHIP BETWEEN IWC AND AMG, AND ABOUT HIS OWN FAVORITE WATCH.

LUCERNE: HOW LONG HAVE YOU BEEN WITH RICHEMONT?

I've been with Richemont for 12 years. I spent 8 years in Europe, working at that time Cartier and several other watch brands. In 2001, I decided I wanted to go to Asia, and so I asked the new CEO of IWC, Mr. Georges Kern, to send me to Asia.

LUCERNE: WHY ASIA?

There must be something in my family attracts me to Asia. My wife probably has Asian blood. I don't know where it comes from, but from the shape of her eyes to the color of her skin, there is Asian blood there definitely. And from my side, I've always traveled to Asia since I was 16, to Thailand, to Vietnam. I can tell you many stories. My grand grand grand grand grandfather was a priest and he went to Korea. He was the first Catholic priest to be killed in Korea. We have stories like that in my family so apparently there has always been an attraction to Asia. I like the people, I like the food, I like the countries, the diversity, the culture, the landscapes, everything.

I feel like I'm at home here, more so than in Europe. I feel great when I'm at home. I don't feel like I'm in a foreign country.

LUCERNE: HOW IS THE MARKET IN CHINA?

The market is growing, that's for sure. It's growing fast in the sense that there are more and more watch retailers who are entering the market. The amazing thing with China is that you have not just Shanghai, Beijing-the big cities, but there's development everywhere. It's the whole country that's developing.

In terms of consumer spending, I would say that it's increasing, but the population that can afford luxury products is limited. It's growing fast, and it's only a certain percentage of the population, but if you have that percentage of the population it's already a big market.

But people should be cautious. We always say that China has a huge potential. Yes, it has, and in the next five to fifteen years it does. But still I think it remains limited for the time being. The average income in China may be increasing fast, but still it's not as huge or as big as what people say in all magazines. The market still remains small. It's growing at a very strong pace, but it's not a mature market yet. People are still discovering luxury products and we still have a lot of education to do to explain what is a mechanical watch, how to treat it, how to take care of it, what are the benefits, why it is expensive, why is it better than quartz watch,and the whole emotion that goes with it.

We have a lot of education to make with the people, in terms of advertising, PR, and events. More and more people are becoming aware of IWC and other watch brands, but we still have a long way to go. We are extremely happy with current developments, but at the same time we remain cautious and we still have a lot of work to do to make the market understand luxury.

LUCERNE: HAVE THERE BEEN ANY SURPRISES IN THE ASIAN MARKET?

No, not really. We have been lucky at IWC because all countries in Asia are growing for us. All countries, from Korea to Australia, they're growing very fast. I'm always amazed by the potential of the brand and amazed by the number of people who are still discovering IWC. IWC is a niche brand amd not everybody knows about it, so we still have to work on this awareness. So this is what we still lack in Asia, the awareness of the brand.

We are five to ten years behind, I would say, in Asia, compared to the awareness of the brand in Europe. In Europe, IWC is almost like an institution.

It's like Bentley in the U.K. or Mercedes in Germany. Everybody knows this company. In Asia it's not the case. We still have a lot of work to do to develop the awareness of the brand. We are very strong in Europe. Fifty percent of our sales are in Europe, and in Asia only twenty percent.

I am also extremely surprised to see how people love the brand, and how people appreciate the brand, and how well some of them know the brand. We have a core base of watch collectors, IWC Aficionados, and IWC collectors, and these people are amazing because they know the brand so well. Sometimes they know more than I do, about specific issues or specific products and unique time pieces. I once met this man who had 500 watches in his collection, and out of this he had 42 from IWC. It's amazing.

But excluding the lack of awareness from the general public and the presence of this core number of people who really love the brand, there are no specific surprises. It's interesting on both extremes.

LUCERNE: WHAT IS YOUR FAVORITE WATCH?

For me it's the Portuguese watch from IWC. It's my favorite watch in the entire watch industry. I don't say that because I work for this company. I was attracted by this watch before I even worked for IWC. I really like the design. Simplicity, elegance, understatement, it has these three. I know I won't get bored by it because of the strength of its design. It has design and substance because of the movement inside. For me it's perfect. The Portuguese watch is almost a mythical product. The design started in 1976. It has a strong yet simple design, and I believe in simplicity in a watch.

LUCERNE: TELL US ABOUT THE NEW IWC INGENIEUR LINE.

This year, 2005, is the fiftieth anniversary of the Ingenieur. We launched the first watch in 1955, and it's been successful since.

We have a concept for every product line. We have the Aquatimer which is associated with the world of the sea and the water element. We have the Pilot watches which ate associated with the air. And we wanted for the Ingenieur to be associated with the land.

The Ingenieur has two line. We have the steel line, which is the rebirth of the original Ingenieur from 1955, but with new patents. The watch is anti-magnetic as well. The watch has a shock absorbing syste, and the famous Pellaton winding system. It can receive up to 5,000 G's. It has been tested in every way you can imagine, including crashes and freesing.

And to celebrate our partnership with AMG, we have created a titanium line, featuring the Chronograph, the Automatic, and the limited edition Automatic CLS 55 AMG.

The CLS 55 AMG automobile has in the same titanium finish as the watch. It's the first time that a car manufacturer has finished the car with the watch in mind. We gave them the watch, and the car was given the exact titanium finish. You also have an IWC clock in the dashboard. It's a very special car.

I think we've brought this partnership with AMG further and as far as we can bring it today, but it doesn't mean that it will stop. I think we will continue to work with AMG. We have a very strong partnership.

LUCERNE: WILL WE SEE MORE FUTURE COLLABORATIVE VENTURES WITH AMG?

Yes it's possible. We enjoy working with them. Even if we're two different companies, we get along very well. We share the same customers and the same passion for engineering and pushing the boundaries for technical achievement. It's exactly the same philosophy. Even in the materials that we use, and in the objective to make the product even more interesting. We have exactly the same values and the same objectives.

Two three-letter brands, IWC and AMG, both with two colors, black and white. The level of similarities is striking. I had the chance to visit the plants of both AMG and IWC on the same day, and it's unbelievable. They were almost the same, down to the presentation of the company strategies.

Will we have future projects? I don't know yet, but probably, because we have a strong partnership and we get along very well. We don't want it to be a short partnership. We believe that we can learn from them and they can learn from us. So why stop is there? We speak to the same customers, so our products appeal to the same people. It's natural.