Why HMT Watches stopped ticking

Recently the Centre announced its decision to close the long moribund watch division of HMT. This is the story of what really happened to a once super brand and a star manufacturer of high precision products. It can be encapsulated in three key ‘T’ words: Technology, Titan and Timidity.

Here’s what happened. By the late 1970s, HMT, in technical collaboration with Citizen, had established an enviable brand name and a reputation for high quality and reliability.

It was, however, able to meet only a fraction of the market demand. Supplies moved glacially from ‘scarce’ in the 1970s to ‘very difficult to get’ to ‘difficult’ by the early 1980s. The arrival of Allwyn, another PSU, in 1981, in a tie-up with Japanese giant, Seiko, also did not make much of an impact.

This suited the prevailing public sector ethos of capturing the commanding heights of industries from steel to antibiotics; and at operational levels doling out contracts and rationing out products to cultivate patronage and extract favours. Smugglers supplied about 80 per cent of all watches sold in India.

In the late 1970s, digital quartz watches entered international markets with a bang and collapsed with a whimper. It turned out that while a $2 quartz watch could deliver greater accuracy than a $1,000 Rolex, the user was not impressed.

The appearance, the presence, and the brand name of the watch were more valued. And given the same brand, analogue watches offered greater design opportunities. Soon, very smart-looking quartz analogue watches started flowing into world markets in large numbers.

HMT and Allwyn also introduced quartz watches, but diffidently. The quantities were small; variety was limited, and the designs pedestrian. Smuggling continued apace.

As a Swiss watch industry big-wig then explained to us, imports being banned was just a logistical problem. Big buyers continued to buy from major brands specifically for the Indian market. Distribution channels were in place as in any legitimate operation.

The only difference was that they had to bypass border controls, a minor extra cost. On the plus side there was no import duty. Industry representatives regularly visited distributors, dealers and service centres. Highly visible advertising and promotional activities never ceased.

It was in this environment that the Tatas decided to enter the watch industry, in partnership with TIDCO of Tamil Nadu. It took a lot of doing for the necessary approvals to get started but that is another story. Among the first things we did was to assess the market and the competition.

HMT watches were procured and sent off for evaluation to our collaborators in France. The results were as expected, but still disheartening for an aspiring new entrant: HMT watches were technologically excellent. We requested and got invited to visit HMT plants in Bangalore and Tumkur.

These visits were very encouraging. The overall impression was of excellent technical management, teeming hordes of slo-mo workers and vast acres of shop floors housing sparsely placed and seemingly under-utilised, high precision equipment.

The influence of Japanese attention to costs was nowhere visible. This was an organisation where productivity was abysmal; and everyone needed to be on a time-bound promotion track so the top kept getting bulkier and the pyramid higher.

After this visit we basically knew we could take on HMT. By the mid-1980s just as we had finalised our plans and selected Hosur as the plant location and were putting together our project implementation team, we were approached by the retiring executive director of HMT, looking for a job! We took him on as chief of manufacturing operations.

He quickly put together a handpicked team of excellent engineers — hard working, sincere and dedicated. He himself turned out to be an excellent hire; our best by a long shot; highly knowledgeable and a superb manager of people and projects.

He also changed the entire complexion of our project. Based on market studies in India and abroad, we had planned an 80:20 mix of mechanical and quartz watches. In many marathon sessions he presented his vision of a watch world where all but the very highest end designer watches would be quartz analogue. And we were convinced to go 100 per cent electronic.

And so it came to be that Titan never started making mechanical watches. HMT and Allwyn, meanwhile, had huge investments not only in plant and equipment but also in labour deployed to make mechanical watches. They also had more qualified engineers per square foot or per watch made than any other watch company in the world. Their respective partners were technology leaders. If they had chosen to, they could have retooled and retrained for new technology with some limited redundancy of equipment.

There was room for Titan, HMT, Allwyn and more in the market. What they needed was temerity at decision making levels. What they got was timidity. Leading to Titan’s market entry we had many sessions assessing our strengths and weaknesses as also opportunities and threats to chart out our product and marketing strategy.

HMT’s platform of accuracy and reliability was easily matched. One decent quartz watch is as accurate as another, but we needed a differentiator. The weapon that readily presented itself was breakthrough product design.

Tatas had no watch design skills, nor access to watch designers in those early days. What we did have was people with well developed aesthetic sense. We collected more such people and our product development team put together a stunning collection using permutations and combinations of international designs Titan entered with a, literally, high decibel but simple product display ad campaign.

The Indian market was never the same again. HMT had been the timekeepers to the nation. Titan became the wrist stylists.

One brainstorming session leading up to the market launch was centred on how long it would take for HMT and Allwyn to strike back with equally good looking watches and a rapid shift to quartz analogue. The best estimate was one year. The worst said no later than three years.

In the event they never did get going. There were just too many internal and governmental compulsions and lobbies. Allwyn Watches shut down in 1995. With HMT watches closing down now, the curtain comes down on one of the most successful public sector units.

The writer is a former executive vice-president of Titan Co, and one of the founders of the company