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Is Rolex intentionally limiting production of new watches to boost its certified pre-owned watch program?

An in-depth investigation of watch industry experts and anonymous sources within Rolex reveals surprising answers to this thorny question. Delve behind the scenes of the crown brandโ€™s strategy and discover the ins and outs of this much-discussed shortage.

The Rolex shortage: myth or reality?

The difficulty of acquiring a new Rolex has become legendary. From the legendary Daytona to more classic models, getting a new Rolex is often a real challenge. This raises a legitimate question: is the brand intentionally limiting its production to support its new Certified Pre-Owned program?

To try to answer this question, we interviewed several industry experts, including two people with direct experience in Rolex authorized points of sale. The latter wished to remain anonymous. Rolex, true to its reputation for discretion, declined to comment.

The Daytona: a special case

The Rolex Daytona occupies a special place in this issue. William Massena, expert and veteran of the watch industry, is categorical: “The production of the Daytona is artificially reduced. Rolex wants to have this watch that is difficult to obtain, and it has done so since 1988.” This strategy aims to maintain the exceptional aura of this iconic model.

Rolex Daytona Features:

  • Iconic model of the brand
  • Limited production since 1988
  • Price on the second-hand market can reach double the retail price
  • Symbol of Rolex status and prestige
  • A general shortage?

    While the Daytona is an extreme case, the difficulty of obtaining any new Rolex model is a reality. This situation creates a rather peculiar customer experience in the brandโ€™s boutiques. One of our informants describes the atmosphere as โ€œtense and tense,โ€ with frustrated customers and uncomfortable salespeople.

    Factors contributing to the shortage:

  • Exceptionally high global demand
  • Limited production capacity
  • Scarcity strategy specific to the luxury sector
  • New emerging markets increasing demand
  • Experts are clear: no voluntary shortage

    Despite appearances, experts interviewed agree that Rolex is not intentionally limiting its production to promote its certified pre-owned watch program. William Massena says: “It's bullshit, just rumors. If you talk to a [le PDG de Rolex] Jean-Frรฉdรฉric Dufour, you will understand that he is not happy, and neither are his resellers.

    Paul Altieri, founder of Bob's Watches, a site specializing in the resale of used Rolexes, agrees: “My gut tells me no, because the global demand is so high that they can barely keep up.”

    Rolex's production challenges

    Several factors explain Rolex's difficulties in meeting demand:

  • Impact of the COVID-19 pandemic on production
  • Construction of a new factory underway
  • Use of temporary factories to fill production gaps
  • High production costs in Switzerland
  • Jean-Frรฉdรฉric Dufour, CEO of Rolex, stressed in a rare interview: “We produce everything here at Swiss costs. So the Swiss franc is a challenge.”

    The Certified Pre-Owned Watch Program: A Long-Term Strategy

    The launch of the Rolex Certified Pre-Owned watch program in May 2023 raises questions about the brand's intentions. According to our sources, this program is the result of more than ten years of reflection and is part of a long-term strategy.

    Objectives of the Certified Pre-Owned Watch Program:

  • Increased control over the second-hand market
  • Offering an alternative to customers facing the shortage of new models
  • Strengthening the Rolex brand image and quality
  • Potential source of additional income
  • An insider tells us: “The CPO (Certified Pre-Owned) program is about control. Rolex doesn't care about money. It cares about control… of its brand, of its service centers.”

    Rolex: a classic luxury strategy?

    Limiting supply is a common strategy in the luxury industry. Paul Altieri notes: โ€œLouis Vuitton and Hermรจs always produce 20% less than demand, because exclusion fuels luxury. Itโ€™s good to be rare.โ€

    Advantages of rarity for a luxury brand:

  • Prices remain high
  • Creating an aura of exclusivity
  • Stimulation of desire and demand
  • Strengthening brand image
  • Rolex's opacity: an asset or a handicap?

    Rolex's lack of transparency fuels speculation and contributes to its mystery. The brand communicates little, offers almost no factory tours and operates like a Swiss non-profit foundation.

    This opacity has consequences:

  • Frustration of some customers and enthusiasts
  • Rumors and theories about brand strategies
  • Strengthening the mysterious and exclusive image
  • Difficulty for experts to analyze the situation precisely
  • One collector expressed frustration: “I feel disgusted. It's not a big amount in my wallet, and they put it on a pedestal like it's out of my reach. They're not even that expensive.”

    Rolexโ€™s current situation raises many questions about the brandโ€™s strategies and the future of the luxury watch market. Between real shortages and marketing strategies, the truth remains difficult to pin down. What is certain is that the mystery surrounding Rolex continues to fascinate and fuel passions, thus helping to maintain its status as the most desirable watch brand in the world.

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