Why Are Watches Always Getting More Expensive, And How Many Rolex Can Americans Buy In A Year?

It is not too late to get to the topic. In fact, the watch industry launches new watches almost every day. But among these new watches, there are many watches that I do n’t even think are worth buying. The domestic bezels are crouching tigers and hidden dragons. If you take these watches out and write them, I think this is also not good for everyone who reads the article. Responsible (people should scold me). So, in the days when I do n’t write a new watch, I want to share with you some interesting things and stories I saw and encountered in the watch industry.
Some time ago I saw some interesting data. These data record the year-on-year changes in luxury watch prices and inflation worldwide (in U.S. dollars) over the past 50 years. With this data, I want to share an interesting question with you, why are luxury watches becoming more expensive? How many watches can the people of the world buy each year? Is this number increasing or decreasing compared to the past?

Ford’s third-generation Mustang in the 1980s (top) and Ford’s current Mustang (bottom)
I know that almost all men who like watches are often interested in cars, so let’s take an example of a car. In 1984, the price of a Ford Mustang was $ 7088. If you convert the purchasing power of $ 7088 in 1984 to the present, it is equivalent to $ 16,444 now. The price of a Ford Mustang is now $ 32,000. So we can see that the current Mustang price is twice that of the 1984 Mustang, and more interestingly, the current Mustang price is V6, and the past Mustang is V8. Two tanks are missing, but the price has doubled. The well-known muscle car is like this, let’s take a look at what will happen in the watch.
Again, let’s look at some data first. In 1957, the first generation of Rolex waterless ghosts was born. The price of this watch in 1957 was only $ 150. Then, the price of Rolex’s waterless ghosts has been rising from 1957 to now (I say a few price nodes), by 1980 it was $ 1,000, in 1992 it was $ 2,000, in 2000 it was $ 3,000, and in 2008 it exceeded $ 5,000 In 2010, it came to $ 6,000, and in 2014 it was $ 7,500. The price is getting higher and higher, some friends will definitely say that the current inflation situation. So let’s take a look at the inflation situation from 1957 to 2014. In 1957, the water ghost sold for $ 150, and the purchasing power from $ 150 to 2014 was equivalent to $ 1265. The price of the waterless ghost in 2014 is $ 7,500, which is 6 times for this $ 1265. In other words, the price of the water ghost has increased 6 times.

Rolex first generation submariner (left) and Rolex cashless water ghost (right)

Rolex’s price increase curve (black) from 1957 to 2014, and the currency inflation curve since 1957.
After the water ghost, I also want to share with you another set of data I see, which is about the steel shell Daytona. I still come up with some price nodes to take a look. The Rolex Daytona was launched in 1964. By 1988 the price had reached $ 2,000, reached $ 4,000 in 1992, reached $ 8,000 in 2006, and reached $ 11,250 in 2012. Prices are rising all the way. Similarly, the price of $ 11,250 in 2012 was six times the purchasing power of Gandhi in 1973.

There is also a very interesting statistic below. That is, in the past 50 years, the annual income (average income) of the American people can buy a few water ghosts and a few Gangdi (because this statistic is made by Americans, it is not suitable for our domestic situation, only For reference, I rounded up to the nearest whole number). The first is a waterless ghost. In 1957, the average annual income of the American people was 11 eleven water ghosts, 14 from 1970 to 75, 10 from 1992, and 6 to 7 from 2008 to 2012. As for the steel case Daytona, you can buy 10 in 1964, 7 in 1988, 5 in 2000, and basically 4 in 2008 and beyond.

Starting from 1957, the American people can buy a few water ghosts in one year’s income (average income). The number on the red histogram is the number of watches that can be purchased. Note that the number on the histogram is accurate to three decimal places. , For example 11.094 only.

Starting from 1957, the American people can buy several Daytona’s income (average income) in a year. The number on the red bar chart is the number of watches that can be purchased. Note that the number on the bar chart is accurate to 3 decimal places. Bit, for example 10.174 only.
The above data and facts are already here. For whatever reason, luxury watches are always getting more and more expensive, which is an indisputable fact. Let’s take a look at why the price of luxury watches is getting higher and higher.

The first reason is inflation, but we have also seen that inflation has an impact on watch prices, but only part of it. Someone used different calculation methods (including price consumption index, skilled worker’s salary level, etc.) to calculate how much the Rolex Gold Date JUST, which was priced at only 360 dollars in 1957, should be worth in 2012. The final calculated price is $ 2980 to $ 6,760. However, the price of Gold Date JUST in 2012 was 10,900 yuan. Compared to the calculated $ 2980 to $ 6,760, it can be seen that the price of watches has increased by 1.6 times to 3.6 times.
So there are other reasons for the rising price of watches. Different people have different opinions on this issue. I think the first point among various reasons is that the added value in watches is getting higher and higher, which has led to a sharp rise in the price of luxury watches. Let’s use the example of a car first. Although the displacement of automobiles is getting smaller and smaller, the configuration of automobiles is getting higher and higher. There are more and more electronic devices and fewer engine cylinders, but with the increasing complexity of turbines, hybrids, and engine technologies, vehicle safety levels are getting higher and higher, and more and more processes are involved. Similarly, the 31 series movement used by the current Rolex 114060 waterless ghost is much more complicated and technically more advanced than the original water ghost’s oyster-type permanent magnet. The bezel symbolizing the technical characteristics of the diving watch has also changed from an aluminum ring to a ceramic ring, plus platinum characters. Now the size of watches is also getting larger, and the metals and precious metals used in a watch are larger. It can be seen that the improvement of the technical content and configuration of the watch itself is the main reason for the increasing price. The Rolex water ghost is a very typical example. We can see from the above data that the water ghost has completely changed from a ‘tool’ (tool table) to a ‘luxury accessory’ (luxury watch).

Rolex’s first-generation Oyster Perpetual movement core. Note that the automatic top is not located on the assembly surface of the movement.

Calibre 3135 is currently on sale. 3135 is one of the most famous movements in the watch industry.
The next reason I agree with is the investment of watch brands. Because the technology and process configuration of luxury watches are getting higher and higher, this has led brands to add more production and process equipment to watch factories and invest in more factories. In contrast, investment in the construction of specialty stores and boutiques. At present, the construction of new watch factories and new boutiques is definitely more than at any time in the past. These large costs are allocated to each watch sold, which will further increase the price of the watch.

The next is for sales considerations. Although the prices of some luxury watches sometimes drop slightly by 5%, the overall trend of watch prices is becoming more and more expensive. It’s like the price of LV goes up every year, and it’s never discounted. If the price of the watch is always reduced, assuming that the price of the water ghost 114060, which is more than 60,000 yuan, has suddenly dropped to 40,000 yuan, then people who bought water ghosts at high prices before will be grieved. The value of watch brands is shrinking. In addition, watches are a kind of luxury jewelry. Since it is luxury jewelry, many people will buy watches with the ‘investment’ mentality. I hope to see that the watch brand they buy is getting more and more expensive. This ‘demand’ also requires watches. Brands must increase the price of their watches on megatrends.

Rolex New Ceramic Circle Daytona 116500

Dark Side of Omega Speedmaster
Although not everyone will agree, but I also think that watches and bags are good. As long as you see what you like, no matter the primary market or the secondary market, as long as the price is acceptable, you can buy it. Waiting blindly will only wait for higher and higher prices (excluding those brands that are often discounted and clear, and the brand value is not strong, so please pay attention to the distinction when buying watches and bags). The price increase is inevitable. The price of Rolex’s new ceramic ring Daytona is 116,500 more expensive than the previous generation Daytona. The dark side of the Omega Speedmaster is more expensive than any previous non-precious metal speedmaster. Because they are all true “luxury accessories”. Things that are getting cheaper are not called ‘luxury jewelry’.