Titan targets 25% share in premium mechanical watch segment

Titan Company Limited is intensifying its focus on mechanical watchmaking to secure a larger position in the premium segment of India's watch market. The company is targeting a 25% market share for watches priced above ₹25,000, according to Kuruvilla Markose, chief executive officer of Titan's Watches Division.

Markose told Mint that the company has some distance to go to reach this goal and will work towards it through its portfolio. The strategic push is anchored by the launch of Titan's Vetra-branded Titan Automatics collection, which is priced between ₹48,000 and ₹55,000. These watches are based on the company's 7,000-series mechanical platform, branded as Vetra 7.

Financial results from the Watches Division show the shift towards premiumisation is gaining traction. For the June quarter, the consolidated Watches business reported total income of ₹1,543 crore, a 21% increase from ₹1,273 crore a year earlier. Earnings Before Interest and Taxes (Ebit) rose to ₹295 crore from ₹287 crore, resulting in a segment margin of 19.1%. The company attributed this growth to premiumisation and a continued consumer preference for analogue timepieces, which grew in the mid-20% range, while smartwatches declined in the single digits.

Financial and Market Performance

The company's ambitions extend beyond the new Vetra range. Titan has been developing mechanical movements in-house since 2010 and believes changing consumer behaviour and rising disposable incomes are creating a larger market for sophisticated watches. Markose stated that Titan is not late for the Indian market but is ahead of the curve. The company is also targeting high horology, including tourbillons, and aims to build global recognition for Indian mechanical movements.

Just like people today say a watch has a Citizen Miyota or Seiko movement, an Indian movement from an Indian manufacturer should also be seen as an expression of excellence, Markose said.

Manufacturing Ambitions and Challenges

Titan plans to develop movements with power reserves extending beyond the current 72 hours, targeting 80, 120, and eventually 180 hours. The company is also working to improve accuracy towards COSC-level capability. An ultra-slim mechanical version of its Edge watch is in preparation, with a movement thickness of 2.2 mm and a total watch thickness of 5.7 mm.

At the higher end, the company has used limited-edition tourbillon watches to demonstrate its capabilities. One Jalsa tourbillon was priced at ₹45 lakh, while another was around ₹25 lakh. Markose said the next challenge is to make high-horology products like tourbillons available at more accessible price points.

However, the company's ambitions face hurdles due to gaps in the domestic manufacturing ecosystem. Titan manufactures several components in-house but still imports critical parts like the hairspring, which regulates a mechanical watch. Markose noted that only a handful of global manufacturers make hairsprings, and Titan does not see itself producing them immediately, though it is working towards making its own assortments. Components such as tourbillon cages are also sourced externally.

Building the required horological talent is another focus. Markose explained that Titan has largely developed its experts in-house. "Most of our horologists are people we've developed in-house, built over time," he said. The company has not hired horologists from outside but has instead focused on internal skill development and technology transfers.

Scaling Production for Global Markets

Titan also aims to leverage its manufacturing scale to develop a model suited for higher volumes. The company produces about 20 million watches annually, most of them quartz. Markose stated that not all mechanical watches can be handmade and that some assembly must occur on modern assembly lines.

He pointed to the Japanese model of combining precision manufacturing with higher-volume assembly as a reference. The Japanese use more high-tech, precision manufacturing and assembly line processes compared to the Swiss, who take pride in hand assembly. Markose said that for India and for Titan's global ambitions, implementing manufacturing execution systems and automation is part of the company's plans.

Over time, Titan envisions the Vetra platform becoming more than an internal resource. The company would like to open up its Titan movements for use by other manufacturers and watchmakers.