Rolex cuts production

[sullivan2829]

Interesting thread. I went in to see my AD yesterday and we were chatting on a similar theme. The suggestion from him after a visit from Rolex UK was that the UK would see less volume this year based on Rolex concentrating on the emerging markets. Again purely here say so take it for what it's worth. Who knows? It will be what it will be.

[BraveBold]

Originally Posted by Maleg

I really enjoy reading your posts. It feels like chatting with my FA behind home plate at Wrigley.

Switzerland requires advanced notification and reporting for planned layoffs. Normally, a significant production decrease will be accompanied by temporary staffing decreases. Has Rolex reported any layoffs? If not, I would likely put these rumors in the AD hard sell bucket and move on.

You are correct (and I have a lot of experience dealing with that region).

The thing is that we have no sense of magnitude. A reduction could be as minimal as those additional facilities would have added to the upside (5% or lower). No layoffs, just changing utilization of existing lines, or even mix changes that result in lower volumes for some references in favor of more volume for others, but with a modest net reduction).

I have to imagine that the volume impacts felt by Omega in China are also felt by Rolex. Again, matter of degree… but a 3% cut (net) is still a cut… even if it makes no noticeable difference to what we see as customers.

[Jackie Daytona]

I don’t believe that to be true. They still need some level of ROI to offset the new factory staffing and tooling etc. If it is true only to the slightest extent to retain the some of the desirability/perception of exclusivity market value. Certainly not massive cuts in any way if any.

[KatGirl]

Originally Posted by brandrea

I personally think the new factory has as much to do with efficiency gains and producing a higher quality product, than it does with pumping out more watches

Funny you should say that, Brian. My feeling was also that the new factories were not about increasing production, but more about R & D and product improvement. Once again, we think alike.

Kat


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[brandrea]

Originally Posted by KatGirl

Funny you should say that, Brian. My feeling was also that the new factories were not about increasing production, but more about R & D and product improvement. Once again, we think alike.

Kat


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[Texasjim]

Do they NEED to sell more watches? Rolex can do whatever they want in production, they prove that every year with W&W in new releases. Brand management may take relevance over production rates. I don’t know if Rolex follows any preset rules in manufacturing and output, I believe they are the case study for it.

[DtownRRS]

They're a huge manufacturing company. All manufactures adjust volume all the time based on weekly or monthly numbers with sales, raw material etc. why would this be any different for a large watch company.

[Gearjockey]

Originally Posted by Maleg

I really enjoy reading your posts. It feels like chatting with my FA behind home plate at Wrigley.

Switzerland requires advanced notification and reporting for planned layoffs. Normally, a significant production decrease will be accompanied by temporary staffing decreases. Has Rolex reported any layoffs? If not, I would likely put these rumors in the AD hard sell bucket and move on.

What’s an FA??

I know what SA is.

[Maleg]

Originally Posted by Gearjockey

What’s an FA??

I know what SA is.

Financial Advisor.

[SVH]

it's manufactured scarcity - and they're ramping up production of it

[yessir69]

Yep. It’s putting things in the AD’s head in furtherance of scarcity marketing.

[JRell]

Originally Posted by SVH

it's manufactured scarcity - and they're ramping up production of it

I thought this as well. Prices dropping on the grey market, so make less and demand goes up.

[Edfrozen]

I heard it from two sources.
100% true
platinum watches and gold watches
production cuts on both

[Patekaholik]

I called this a couple of weeks ago as Rolex visited my AD as well. Lower production numbers are coming and you will all notice this, whether you believe it or not.

[Gearjockey]

Originally Posted by Maleg

Financial Advisor.

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[WatchTimes]

LOL!
There is a whole thread about this right above this one and you felt a need to post another thread? Simply NO ONE knows the answer for this ? unless they work for Rolex and if they know they have NDAs in place and can't say.
ADs have no clue despite what they tell you.

[WatchmeTimepiece]

Interesting, so this would make those watches of that material more expensive?

[mrlube1151001]

Originally Posted by Patekaholik

I called this a couple of weeks ago as Rolex visited my AD as well. Lower production numbers are coming and you will all notice this, whether you believe it or not.

This exactly what my A.D told.The information I got was not from an SA but from the G.M .That’s the reason I started this thread.Time will tell whether there is any truth to it.May not impact steel but may be gold watches.

[mrlube1151001]

Originally Posted by Triggerfish

What they could do is reduce production of datejusts and solid gold PM Pieces, and instead focus on what most consumers want and have been waiting for years- SS sport models, Daytonas, etc.

I have been through 3 major life events where I wanted to purchase a new timepiece in the past 2 years (events that were once in a lifetime) and my AD has been pure crickets and as a customer I have been treated like I don't matter (and from what I can tell, it's not just me, but a great percentage of Rolex customers who are done with the brand). This is 100%, IMO, because of lack of product.

Rolex likes to keep the hype on certain models like BLRO DAYTONA .These watches have been hard to get for a long time.If Rolex wants they can produce Daytona’s all day long.But they won’t do it.They will create artificial scarcity to keep the brand going.

[Calatrava r]

Presumably, ADs hear whatever they hear from their service representatives. I think ADs are told their total allocation number for the year and these may not have increased as much as some ADs wanted. As said above this may also be an AD politely telling someone they are not high on the ADs mind for anything in the near future. One thing is true, nobody knows much of what is going on, because so much of the Rolex sales process/customer relations is specific to each AD.

[askdanny]

The number one goal of the luxury industry is not profits. It's desirability.

[GMTmatt]

Comparing Rolex to general manufacturing like GM and Fortune 500 companies is a poor comparison. Rolex is a luxury product and has been prioritizing exclusivity for a number of years now.

[Zedder]

Originally Posted by GMTmatt

Comparing Rolex to general manufacturing like GM and Fortune 500 companies is a poor comparison. Rolex is a luxury product and has been prioritizing exclusivity for a number of years now.

Try and keep up…we were talking about manufacturing capacity. Every business controls supply to achieve pricing/profit goals - luxury items are no different.

[0nly5iv3Digits]

More "scarcity". Shameless tactics... but hey, the economy is rough

Originally Posted by askdanny

The number one goal of the luxury industry is not profits. It's desirability.

I tend to agree with this. Profit is up there, sure. But not at the expense of ruining brand image and therefore running the company into the ground. Slow and steady is the intergenerational game

[Triggerfish]

Originally Posted by JRell

I thought this as well. Prices dropping on the grey market, so make less and demand goes up.

Ha. I know at least 6 guys at work that are waiting to buy a watch from an AD (no exaggeration) but absolutely refuse to buy grey market. Also, I don't think anyone cares if they are "rare" or "over market price" when they buy them... they (and I) just want the stinking watches. We've all talked about this and it's fun to hear each ones experiences at the AD!

Personally, I'm glad to hear that the overseas luxury markets are slowing, maybe, just maybe, I'll get a call now?

[Triggerfish]

Originally Posted by askdanny

The number one goal of the luxury industry is not profits. It's desirability.

To me, zero availability is bad for a brand though.. I know many that have sworn off Rolex and spent their money elsewhere because of the horrid games we have to play at the AD. I think the brand would be better if it could accommodate it's customers within a reasonable amount of time. I've been on a wait list now for over 2 years for a SS Sport model, that's one hell of a list of waiting customers! I can't imagine it would be a quick sweep up of the people on the waiting lists and then all of a sudden everything is a walk-in buy again. Excluding datejusts and the less popular models, of course.

[Rolexspain]

Good morning everyone

I have been reading the forum for some time but never registered before.
I just wanted to comment that what the OP says is true. These days I have been confirmed by directors of several Spanish dealers. In Spain, they have been informed of a major cut in steel parts, as well as 31mm and 28mm datejust. Another model that they are going to cut a lot is the day date.

Best regards

[JRell]

Originally Posted by Triggerfish

Ha. I know at least 6 guys at work that are waiting to buy a watch from an AD (no exaggeration) but absolutely refuse to buy grey market. Also, I don't think anyone cares if they are "rare" or "over market price" when they buy them... they (and I) just want the stinking watches. We've all talked about this and it's fun to hear each ones experiences at the AD!

Personally, I'm glad to hear that the overseas luxury markets are slowing, maybe, just maybe, I'll get a call now?

They are still hard to get. But maybe because the grey market is over flooded, those prices will continue to drop, so making even less watches than normal will keep the aftermarket prices higher. While I don’t buy Rolex for the value, I believe many do and that is part of the allure for some. That being said this is pure speculation and I agree with you, the easy to get the better.

[GMTmatt]

Originally Posted by Zedder

Try and keep up…we were talking about manufacturing capacity. Every business controls supply to achieve pricing/profit goals - luxury items are no different.

If they are not different why does Rolex not increase production of the Daytona at the expense of a lower demand model? Luxury products are a different breed. Do you really think Rolex wants to go back to the days where every model (except stainless Daytona) was sitting in the case waiting for any boob to walk in from the street and buy? And why do you think Rolex is culling the amount of AD’s when they already sell everything they make? Exclusivity.

[BraveBold]

Originally Posted by GMTmatt

If they are not different why does Rolex not increase production of the Daytona at the expense of a lower demand model? Luxury products are a different breed. Do you really think Rolex wants to go back to the days where every model (except stainless Daytona) was sitting in the case waiting for any boob to walk in from the street and buy? And why do you think Rolex is culling the amount of AD’s when they already sell everything they make? Exclusivity.

Precisely. They want to stay ahead of the curve as demand moves. More complex because of grey dealer inventory too.

Adjustments like this have little to do with manufacturing capacity, especially (as you say) for a brand like Rolex.