2022 has been an unusual year in many respects. Although the privations of the previous two years, not least because of the pandemic, were over for many western nations, economies all over the globe were still in recovery mode. This has affected worldwide production and luxury brands like Rolex have been caught up in the turmoil, too. Whether it has been blockages in the Suez Canal that caused ocean-going vessels to divert their planned routes or the war in Ukraine disrupting shipping and aerospace routes, it has simply been harder for manufacturers to source their raw materials and components. Increasing tensions between Taiwan and China have also led to some problems with the usual way international shipping has traditionally taken place.
As a Swiss watchmaking firm, you might be forgiven for thinking that Rolex would be entirely unaffected by global supply chain problems. However, this is simply not the case. The company is just as reliant on a docker in Australia being able to load up a vessel with gold supplies as it might be on shipments through the Mediterranean of palladium, diamonds or other precious materials. So, what has the outcome of the pandemic and the various global tensions with shipping been for Rolex? In short, their production levels have dropped.
Of course, it should be pointed out that this hasn’t affected all Rolex models the same way. Indeed, some Rolexes haven’t been affected that badly at all. However, the overall level of production of luxury watches has fallen over the last three years or so. As such, Rolex dealers have been snapping up everything the Swiss firm will allow them to stock. Consequently, dealers’ prices have gone up. Collectors and investment buyers have been purchasing models that they might not usually consider since these are the only ones they can get. What has this all added up to? Simply put, there’s been a greater scarcity of Rolex timepieces on the market.
It hasn’t all been about supply chain issues, either. Rolex, like many firms during the pandemic, shrunk its workforce. Training up newcomers for such a specialist brand isn’t easy and Rolex is still recovering somewhat. Even if it could obtain all the supplies it needed overnight, production levels would still probably be down. According to Bonds of Brentwood, a specialist in used luxury watches, this has led to a buoyant second-hand market in Rolexes, something that is likely to continue into 2023 and beyond. In other words, because Rolex dealers can’t supply new customers with a watch for sometimes as much as two years, more and more people have sought investments and watches to wear in the used market.
While the second-hand market is steady and the new Rolex market is in high demand, Rolex has another consideration to make. Would upscaling production end up reducing consumer demand? With the watchmaker achieving what many luxury brands want – over-demand for its products – it may be some time before enough new Rolexes come onto the market to change the current situation significantly. Ultimately, only time will tell, something that Rolexes are particularly useful for, of course.
