As HMT Watches, one of India?s signature PSUs, winds down business, it is time to reflect on how iconic the brand once was and how it ended up being on life support. Formed in 1961 in collaboration with Japan?s Citizen Watch Co, HMT Watch Business Group was restructured in 2000 as HMT Watches, a wholly-owned subsidiary of Hindustan Machine Tools (HMT) Ltd. The company, for long, promoted itself as the timekeeper to the nation. At its peak, the watchmaker held 34% of the Indian wristwatch market and 71% of the mechanical watch market.
The company, however, had been recording losses ever since 2000, and with these totaling R242.47 crore in FY12, the government has now decided to shut down the company in a phased manner, as recommended by the Board for Reconstruction of Public Sector Enterprises. The company had lost the plot early on, despite the popularity of its watches. For example, as a research points out, though the company was the first to bring quartz battery technology in watches to India, it failed to position the product right. While the quartz watches were promoted as a new-age product targetted at the youth, they were priced so high that only the affluent middle-aged buyer could afford them. The product, therefore, was lost on both buyer groups, being too expensive for the young buyers and too ?newfangled? for the high-income, but conservative, older buyers. So, sales never really took off even though prices were revised?by then, private players like Titan had already captured the market with their competitive prices. There has been a glut of competitors in all segments, from budget to premium watches, since the nineties. Incomes have also grown concurrently and consumers can now choose from the best of foreign brands. Within two decades of liberalisation, HMT had gone from market-leader to bust. And now, the time for it to script a revival has run out.