Like many others I took Rolex at their word when they said that they were producing more than their regular production volumes to try to meet demand. However, this is beginning to look more and more like a lie. With the Coronavirus fears and containment in full swing, Asian markets have come to a complete stop and markets in Europe are now starting to be effected with Northern Italy basically shutdown as well. If Rolex was telling the truth, this would have more than stocked the shelves of ADs in the rest of the world. However, a quick check of ADs in the rest of the would shows that they still have empty shelves.

What do the rest of you think, is Rolex being honest with their inventory?

 

Nothing to see here folks, just another troll.

 

Yup, nail on the head that, Denmark totally rotten, lying about Rolex production and all. Personally, I think they are hoarding them. Just imagine : if I can make a watch for $1, and the market will buy them all at $2...if I just secretly keep everything I produce, I get twice as wealthy, and quicker the faster I produce it...

 

That just clarified the whole Rolex shortage issue. Brilliant.

 

I wasn't implying that they're hoarding just that they are not producing as much as they claim. In fact, it benefits them to produce fewer as that drive up prices because demand is so high.

 

Who knows. It's all speculation. All I know is at current market prices, I can 100%, absolutely tell you I'm not buying a Rolex sport watch!

But I am getting excited about buying my first Speedy soon!!!

 

Im just wondering why you removed ‘Denmark’ from your original post. It totally destroys the context of my devious insight...

 

Didn't want the post to sound like I'm trolling as I'm not. I'm genuinely disgusted at Rolex for playing games.

 

Get comfortable with disgust my friend

 

But Rolex doesn't benefit by wholesaleing a Daytona into the system which has an MSRP of $13,150 only to see it go on the grey market for $22,000. Why would Rolex benefit by holding back production? To make the dealers and buyers frustrated? That would be very perverse and non-sensical. The supply chain is long, I wouldn't expect to see any effect of the coronavirus on the total availability of Rolex's for many months, if ever. The world is not shutting down because of this virus.

 

What do you mean the supply chain is long? As far as I know, Rolex is vertically integrated. They produce just about everything in house. Furthermore, they ship directly to ADs. So I'm not sure where the delay comes from? This started in HK before the Coronavirus. HK sales were the first to get hit from 6 month of protests which allowed them to shift inventory to the mainland. Then the Mainland stores all closed for the past two months which means they would have shifted their inventory to the rest of the world. Remember, they produce almost 100k watches per month. That's a lot of watches. Where did some 30-40k/month of watches go? As eugene said above, they're not hoarding them so where did they end up?

 

Actually Rolex production has come to a halt due to a shortage of parts from China.

 

@TechFounder, you are asking a question that has been asked over and over again. No one knows the answer except Rolex SA, and even they may not fully understand it. It's just something that isn't going to be resolved on a watch forum by people who don't know how Rolex operates or their actual production figures by model, country destination, sales figures, etc.

What I meant by a long supply chain was there is a period from a watch leaving the factory and getting to some dealer's showcase so whatever is happening to commerce in the watch area hasn't shown up yet in increased availability.

 

its not so easy with the shipping my friend.. several EU countries have severe shipping restrictions from and into the affected countries.. I was about to ship some stuff to Hong Kong and Italy today with no luck at all...

 

That sort of adds to my argument doesn't it? Since China, HK, and other affected areas are more than 25% of Rolex's sales, those new inventory would have been diverted elsewhere. But where? All of us can see that they didn't end up at our local ADs. The only rational explanation is that Rolex never produced the numbers most people cite.

 

The local Chinese market may be still accepting and holding their stock fully expecting that this issue will pass fairly quickly and the economy will get back to some sort of normalcy. They wouldn't be too keen on rejecting stock and then not being able to get it further down the road.

 

I'm trying to unpack what most people, including their executives, have been using as an excuse for a lack of inventory at ADs: that Rolex is producing 10-15% more than their normal supply of 1 million watches per year but that's still not enough. The coronavirus seems like the perfect foil in testing the veracity of that statement. When stores are closed and people are afraid of death, sales of luxury goods like watches goes to pretty much zero. Since HK and China makes up about 20%+ of Rolex sales, that means for the past two plus months, they would have had about 40k watches diverted. The only reason I can see for those inventory not showing up in the rest of the world is that Rolex is not actually producing over 1 million watches a year. That they're producing far less. But why would they produce far less than normal in a market with shortages when there's nothing stopping them from doing so? The only rational explanation I can come up with is to create a premium distortion in their prices. In other words, Rolex is directly responsible for creating this supply/demand imbalance and the huge gray market.

 

They're closed. No one is at the store to accept delivery.

 

You know what - this debate is really boring. It has been posted again and again by different people who independently gain insight into Rolex marketing strategies, and every time the debate goes round in circles. Could we have a moratorium please?

 

I agree, @TechFounder is going to believe what he believes, he has convinced himself that Rolex is being dishonest and is causing the shortage on purpose for some corporate reason. You cannot reason with people who have made up their minds. I'm out.