Whether you enjoy reading, listening to music, or watching movies, you’ve heard that Rolex watches are the height of fashionable luxury in men’s watches. Rolex watches are in short supply now. Cynically, some people believe that the brand is purposely limiting supplies to boost demand. But the watchmaker has clearly denied this throughout the years. With the unveiling of additional and even temporary production facilities, Rolex has begun to back its claim. It’s because they truly want to put a watch on your wrist!
Hans Wilsdorf established the Swiss business Rolex SA. It is one of the most well-known watchmakers in the world. It has created upscale watches for collectors as well as other tool watches ever since the Rolex company’s founding. Make sure to read this article to understand completely the current Rolex watch availability. This is for people who are interested in luxury watches and want to get a new Rolex.
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Luxury watchmakers are struggling to keep up with demand
Everyone is aware that you can’t simply walk into a Rolex store and purchase one. The top Swiss watchmaker produces approximately 1 million timepieces annually. But demand far outstrips supply. It is especially true for steel sports models like the Submariner, which costs 8,500 Swiss francs ($8,836).
Authorized shops have always struggled with Rolex scarcity. They have been forced to either form waiting lists or try to push clients toward other makes and models. According to the largest Rolex dealer in the UK, other luxury watch manufacturers began to experience supply challenges in 2022. This was due to an increase in demand.
Several models of Cartier, a Richemont-owned company, and Tudor, a sister brand of Rolex, cannot be kept in stock at the company’s 171 locations in the US and UK. This is according to the CEO of Watches of Switzerland.
CEO Brian Duffy said of the Cartier aviator watch, “We can’t get enough Santos.” In particular, he said, “We can’t get enough Tudor,” referring to the company’s chronograph models.
Luxury watch sales increased during the pandemic. It’s because cash-rich homebound customers diverted funds meant for entertainment and travel to pricey timepieces. Also, retailers profited from booming online and in-store sales after the stores reopened.
Shortages are not a viable tactic
Swiss watchmakers claim that they cannot simply ramp up production in response to growing demand, unlike certain other businesses. Luxury watches are, by definition, complex and precise. They claim that if quality is to be maintained, they need time to manufacture.
Rolex, based in Geneva, responded to criticism from unhappy potential customers and rising pre-owned market prices. They made an unusual public remark: “The scarcity of our products is not a strategy on our part.”
“Our current production cannot completely satisfy the current demand, at least not without compromising the quality of our watches,” the privately held business stated.
What were the problems that Rolex had?
Experts might not like Rolex. It’s because of the brand’s inability to innovate and its abandonment of its original goal of focusing on brand recognition. The company is dealing with two issues that are affecting the market. Also, it could lead to competition from other companies.
- In several markets, Rolex watches appear to be in low supply: While COVID-19 created significant problems for a variety of businesses, the luxury market seemed to thrive. People’s desire for Rolexes increased since they were unable to spend their money on trips, expensive meals, and other social activities. Rolex currently faces a supply-and-demand issue as a result of that. A production halt brought on by the epidemic.
- Dealers seem to be making things worse: Authorized Rolex dealers have recently benefited from the shortfall, which they are aware of. Customers have switched to other brands, harming the reputation of the company. It happened after hearing stories of people seeking to buy a Rolex watch only to be told that they must buy a particular amount of product to be put on a waitlist.
- The aggressive imitation and sale of Rolex watches are common: There are dozens of pushers on New York’s streets. They will tell you they can sell you a Rolex right now, but you’ll probably end up being taken advantage of. This only makes the issue on the list worse. Dealers know you don’t have many options.
The Rolex shortage is not new!
Rolex waiting lists are not a brand-new phenomenon. There has been a long-term increase in interest in watches in general. When the latest generation of Rolex Daytona is released in 2016, several watch industry experts predict true scarcity will start to emerge. This craze, however, has even older roots.
According to Joshua Ganjei, CEO of the European Watch Company in Boston,
“Watch collecting used to be the thing of an exclusive group made up of enthusiasts having small private meetups and events. But with the rise of internet blogs, forums specifically for watches, and Instagram, the passion has truly democratized.”
There are now more options for buying and selling watches. It is because of this democratization, which also includes the exchange of knowledge and excitement. It is now simpler than ever to learn about watches, buy them, and buy popular goods with the goal of profiting from them.
Rolex increases manufacturing in response to rising demand
Fans of Rolex who complain that there aren’t enough watches may be in for a surprise, at least in the near future. The king of the luxury watch market is establishing three temporary production facilities for its watches in western Switzerland’s canton (or state) of Fribourg. Construction on the facilities will start later this year. Also, production could start as soon as 2025. When reporters contacted Rolex for comment about these changes, Rolex said that it had nothing further to add to what was already reported.
At the moment, Rolex has four locations operating in Switzerland. They are:
- the global headquarters in Geneva,
- the Plan-les-Ouates site that creates cases and bracelets,
- the Chene-Bourg site that creates dials and does gem setting, and
- the Bienne site that creates mechanical movements.
Additionally, Rolex intends to construct a fifth permanent location in Bulle, Switzerland.
“The new manufacturing site in Bulle, just like these three temporary setups, will allow Rolex to boost its production capacity, promote growth, and meet growing demand,” the watchmaker said in a statement to Bloomberg.
For some time, there has been a Rolex supply problem. The company has already made comments about it. The firm stated in September 2021 that:
“Our current production cannot fully satisfy the current demand. But at least not without compromising the quality of our watches. It is something we refuse to do as the quality of our products must never be sacrificed.” “[Rolex watches] are handcrafted with great care to fulfill the brand’s outstanding and high standards for quality, functionality, and aesthetics. Naturally, this limits our production capabilities. We continuously expand as much as we can while always maintaining our high standards of quality.”
It seems that Rolex is now, at last, addressing the issue of increasing production capabilities. Rolex does not release production statistics or financial information. It is because it is a foundation-run, private business.
Around one million mechanical clocks are created each year, which is an incredible figure for a handmade product. But even that big number does not appear to be putting a dent in Rolex’s global demand. According to a BCG analysis published in March 2023, the market for new luxury watches was worth $53 billion in 2021. But it will increase to $66 billion in 2026. The survey also revealed that Rolex, together with other Swiss watch legends Patek Philippe and Audemars Piguet (AP), controlled the luxury watch market.
Late last year, Rolex decided that it needed to enter the rapidly expanding certified pre-owned market. It is not only to cash in on that demand but also to provide some much-needed supply to its approved retailers like Bucherer and Tourneau. Additionally, the move increases market liquidity for pre-owned Rolex watches. It may even increase their worth slightly compared to brand-new watches.
The demand for Rolex certainly exceeds the supply. So, the company’s expansion is good news for watch enthusiasts. This is according to Eric Wind, owner of Wind Vintage, a high-end pre-owned watch retailer. “However, hoarding brand-new watches might not be a good idea for those who speculate on new Rolex watches. The good news about old Rolex watches is that the brand no longer produces vintage versions. So maybe people looking for value may turn back to vintage watches.”
In the interim, Rolex boutique display cases are awkwardly empty. Consumers on lengthy waitlists vent their dissatisfaction online. Rolex is thus constructing temporary buildings in the near future. A location in Villaz-Saint-Pierre will begin operations in 2024 despite still being in the pre-construction stage. Also, production at a Romont facility is expected to begin in 2025. Bulle has a third location specifically for hiring.
Increased production will probably have a gradual impact on the market. The first temporary factories will start operating around 2025, which might be as soon as then. Yet, there are signs that the height of Rolex scarcity has already passed, which is good news. The most expensive pre-owned prices have begun to decline, while new watches appear to be a little more readily available.
Despite this, the brand undoubtedly reaps the benefits of strong demand. As Rolex watches will undoubtedly continue to be in high demand, Rolex retail prices will keep increasing year over year. But the current market trajectory, along with an increase in manufacturing, should start fixing the major imbalance that is currently present. It is good news for many eager watch enthusiasts.
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