The Australian Government
The conservative government, now in its third term, is accepted as the legitimate government, for the time being. It is tolerated, not actually loved, even by most of those who voted for it. The Government’s national budget was presented to parliament on 10th May and broadly speaking it was an opportunity to hand out substantial tax cuts to the high end of town.
The Government predicts the economy will press through its present soft patch to record solid growth of 3% per annum, moderately falling unemployment to 5% and inflation steady at 2.5%. It was a budget which was weak on future strategies for managing the economy (and water resources) and concerned itself more with ingratiating the rich and buying favouritism with the electorate. The rich got richer, the comfortable became more comfortable and the poor wondered why.
The current soft patch is little more than that but it has temporarily stalled the ever-upward spiral of city housing prices. City and suburban consumers stopped spending when their house prices stopped rising, and small business has lately borne the brunt of a spending squeeze.

Incomes
Average annual income before tax is A$52,000 and the price of petrol is currently A$1.06 but expected to fall below A$1.00 in the next few weeks unless another global oil hedge collapses (or the Chinese buy another car percent of population putting another 13 million cars on the road overnight).
Australia’s richest man is media magnate Kerry Packer who again topped the annual Business Review Weekly “Rich 200 list”, boosting his fortune by A$400 million over the past year to A$6.9 billion. Actress Nicole Kidman - who now earns A$15 million a movie - ranked 136th with a fortune of A$190 million. Kylie Minogue followed tennis star Pat Rafter at 29th on the young richest list with A$34 million but ahead of Lleyton Hewitt at A$22m. [ A$100 = 60 euros approx.]
Australia’s poorest are the absolute equal of anywhere but have the relative benefit of a pleasant climate whether sleeping under the stars out of advantage, adversity or adventure.
But the statistics of cars in Australia provide an interesting measure of the scale and availability of discretionary income to extrapolate into marketing models. There are about 13.5 million motor vehicles registered in Australia which equates to 675 motor vehicles per 1,000 residents and note that one in five of all new vehicles sold in Australia is a 2-ton four-wheel-drive. Australia has over 800,000 kilometres of roads (about equal to 20 times around the world) and very few of these 4WDs will ever see any action away from the cities let alone off a fully sealed road. Perhaps they are a fashion accessory quite as much as a handbag, shoes, hat – or prestige watch. And here lies a contrast with the European watch fraternity.

Australians and watches
There are people who attend BaselWorld with a watch on each arm and different ones to wear each day – and these are mostly enviable pieces. Many in Australia might well comment that this is thoroughly pretentious but then go right out and buy a huge shiny 4WD to collect the kids from school. There is enough material for a conference in these propositions!
Australia is a politically stable and reasonably safe place to live despite irrational military adventures in Iraq (scouring the other side of the world for mythical WMDs) causing disconcerting levels of attention from those who wish us ill.
So this is the contradictory thumbnail picture of Australia – an interesting and magnetic place to visit and further, I know nobody who was born here who would consider living anywhere else.
There are interesting possibilities for the prestige watch industry which can be inferred from the foregoing. But as a starting point the Federation of Swiss Manufacturers ranks Australia 18th in the order of world markets and Australia’s increase in sales of Swiss watches in 2005 is a whopping 47.5% increase over the same period of 2004.
The watch market has clear segments:-
1. Fashion watches – where the pricepoint invites an on-the-spot de-cision to buy or walk away.
2. Designer and boutique makers – where the price may easily reach into the stratosphere on a one-off example from a (very) serious maker.
3. Traditional – mechanicals from the prestige brands who are unaffected by market highs and lows and the watches they make are anchored in historical tradition.
Segments 2 and 3 are those interesting to collectors but some brands in the traditional category have some perplexing issues.
The differences between one Swiss brand and another are manifest, which is why we make choices. But when we choose and trust a good brand, are we really getting a watch made in a different factory made on different machines by different peopleı Or perhaps we are buying a watch conceived by a design department, bearing a venerable brand name but the watch movements themselves are all made under the same roofı Of course the fact lies somewhere between and depends on the particular brand.


TO BE CONTINUED...
In the forthcoming days, the rest of this lenghty survey will be added to our europastar website.

Australian Market Focus: Part 1
Australian Market Focus: Part 2
Australian Market Focus: Part 3
Australian Market Focus: Part 4


Source: April -May 2005 Issue

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