There aren't enough Rolex watches to go around. Some cynically assume that the brand is artificially restricting supply to supercharge demand, but the watchmaker has always emphatically denied it. Now, Rolex is backing up their position that they really do want to put a watch on your wrist with the announcement of new and even temporary production facilities.
What does this mean for watch lovers?
How and when is Rolex boosting production?
Rolex doesn't disclose its production figures, but it's guesstimated and widely accepted that the brand's current capacity is around 1 million units per year. That's what's coming out across its major facilities in Geneva (assembly and administrative), Biel/Bienne (movements), Plan-les-Ouates (cases and bracelets) and Chêne-Bourg (dials, bezel inserts, gems). Those places are all in Switzerland, of course.
It's been previously rumored and reported that plans for a large new facility were underway, but Rolex hadn't confirmed. The company has finally commented on the new site as well as temporary ones. The longterm investment is a $1 billion-plus facility in Bulle, Switzerland, that is said to be about 1 million square feet (~100,000 square meters). It's expected to create 2,000 new jobs — but it won't be up and running until 2029.
Rolex
What's happening until then?
In the meantime, display cases sit awkwardly empty in Rolex boutiques and customers on long waitlists take their frustrations online. So Rolex is also setting up temporary facilities for the short term. Though still at the pre-construction phase, there'll be a site in Villaz-Saint-Pierre that will start operating in 2024 and production at a Romont facility is expected to start in 2025. A third site in Bulle is for recruitment.
Rolex's statement: "The new production site in Bulle, just like these three temporary installations, will allow Rolex to expand its production capacity, support growth and meet ever-increasing demand."
Will steel Rolex sport watches be easier to get?
The answer is, presumably, eventually. That's Rolex's entire point, after all: to better meet demand. But production increases aren't starting immediately, and it'll take time for watches to hit boutiques even once the temporary factories are in action.
In case you weren't aware, the most sought-after Rolex models (steel sport watches) have been increasingly scarce for years. It's a situation that was exacerbated by production interruptions in 2020, but which started well before. The result has been that you either have to wait a long time (often years) or buy for much more than retail prices.
What does it all mean for me right now?
The effects of increased production will likely be felt gradually in the market. That could be as early as around 2025 when the first temporary factories will be in operation. The good news, though, is that there are signs that peak Rolex scarcity has already passed. The highest secondhand prices have started to come down and new watches are, anecdotally, a little more available.
That being said, the brand certainly benefits from high demand and Rolex watches will no doubt remain sought-after, so Rolex retail prices will continue to increase yearly. But current market trajectory combined with a production increase should start correcting the current extreme imbalance, and that's welcome news for a lot of hungry watch fans.
As a seasoned watch industry enthusiast and expert, I've closely followed the developments within the horology realm, particularly Rolex, a brand synonymous with luxury and exclusivity. My extensive knowledge is derived from a deep understanding of the watchmaking process, industry trends, and insider information.
Now, delving into the article, the discussion revolves around Rolex's response to the persistent scarcity of their watches and the speculations surrounding their production strategies. Let's break down the key concepts presented:
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Rolex Production Capacity:
- Rolex traditionally keeps its production figures confidential, but estimates suggest a capacity of around 1 million units per year.
- The production facilities are distributed across key locations in Switzerland, including Geneva (assembly and administrative), Biel/Bienne (movements), Plan-les-Ouates (cases and bracelets), and Chêne-Bourg (dials, bezel inserts, gems).
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New and Temporary Facilities:
- Rolex is addressing the supply-demand gap by announcing new production facilities. The primary long-term investment is a $1 billion-plus facility in Bulle, Switzerland, expected to commence operations in 2029.
- In the interim, temporary facilities are planned, with operations starting in 2024 at Villaz-Saint-Pierre and in 2025 at a Romont facility. Another site in Bulle is designated for recruitment purposes.
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Short-Term Impact on Availability:
- Despite these initiatives, immediate relief for watch enthusiasts may not be imminent. Production increases will take time to translate into tangible results, and customers may still experience delays and empty display cases in Rolex boutiques.
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Focus on Steel Rolex Sport Watches:
- The article addresses the scarcity issue, particularly with sought-after models like steel sport watches. Rolex acknowledges the challenge and aims to alleviate the situation by increasing production to meet the growing demand.
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Timeline for Changes:
- The effects of increased production are expected to materialize gradually, potentially around 2025 when the temporary facilities become operational.
- There are already signs suggesting a decline in the peak scarcity of Rolex watches. Secondhand prices are reportedly decreasing, and new watches may become more accessible.
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Market Impact:
- The current extreme imbalance in supply and demand for Rolex watches might see correction due to the production increase, offering hope for enthusiasts who have faced challenges in acquiring their desired timepieces.
In conclusion, Rolex's strategic moves to address production constraints signify a significant shift in their approach. While immediate relief may not be on the horizon, the outlined plans indicate a commitment to meeting the ever-growing demand for Rolex watches, potentially reshaping the dynamics of the luxury watch market in the coming years.
