I recall the time around 3-4 years ago when I first begun to entertain the idea of owning a "serious" watch (which, at that point of time, basically means a Rolex, given how little I knew about the world of Haute Horlogerie back then, thinking to myself Rolex is perhaps the most expensive watch brand out there), I was taken aback by the "insane" price tag. I mean, I know owning a Rolex is a pretty cool thing and all that but really? HKD40,000 for a 34mm Rolex Air-King? Why on earth would somebody squander that much money to buy a piece of steel that honestly, doesn't even do its job to tell time as effectively as its quartz counterparts (for those of you who still think all watches are powered by batteries, check out this article we published a while ago)? I was baffled. And I'm sure many of you would have wondered to yourself the very same question I had, whenever you check out the unreal price tags of any luxury watch inside a display window: just exactly why are luxury, mechanical watches so damn expensive?
Being in the watch world long enough and I can guarantee you that you will grow accustomed to the almost astronomical retail prices of many of the best Swiss/ German mechanical watches. A HKD90,000 Rolex Daytona would soon feel more like an entry level "nice" watch. A HKD150,000 Patek Philippe Calatrava? That's like the minimum you have to pay to own a piece of Patek and have a taste of luxury watchmaking. A HKD250,000 A.Lange & Sohne Saxonia Moonphase? Alright, now things are becoming a bit more serious. But that's nowhere close to the most expensive wristwatch ever, which was sold for a jaw-dropping HKD56,000,000.
Doesn't it feel unreal at times that a small piece of timepiece could cost more than, say, a brand new BMW? Or even an apartment? How do we make sense of all these and not get carried away by the glam and hype of this hyper lux watch world that we live in? Today we're here to explain why luxury watches are worth that much and to put things into perspective.
First off, a top of the line mechanical watch is EXTREMELY difficult to develop. That's especially true in the case of watch companies who are capable (and thus, expected) of creating their own in-house watch movements, such as Patek Philippe, Audemars Piguet, A.Lange & Söhne etc. Despite the fact that the basic mechanism of a watch movement has changed little over the course of its development, watchmakers continues to work hard in outdoing their old selves by creating stronger, smarter, better and eventually, more special watch movements that suits the brand's identity and commercial strategies. And to design and build a never seen before mechanical movement, my friend, is no easy feat. Even with the help of computerised industrial engineering softwares/ systems, the process can still take years. That's even more true if complications are involved. You simply can't design a whole new tourbillon/ perpetual calendar movement in 2 weeks. Watchmakers at the top echelon of the horology universe can, and will, take its time to create beautiful products if needed.
Another cost factor is labour. As a matter of fact, a good number of top luxury watchmakers have their roots in this wonderfully scenic, yet at the same time utterly unaffordable alpine country called Switzerland. That essentially means you can expect hefty manufacturing cost and of which, labour accounts for the largest chunk. Bear in mind that every single watch coming out of these watch brands' factories is assembled by a highly trained, super skillful watchmaker who has also spent hours adjusting and testing the timepiece, making sure it is of the highest quality possible before having it delivered to you. All these translate into a considerable amount of labour cost (rightfully so).
2. Manual Finishing
Finishing a movement rids the traces of machining and ensure the movement's longevity and reliability. Not to mention an expertly finished movement can tremendously enhanced the watch's overall appeal and collectivity, both desirable traits that further elevate the price. It is through finishing that dull metals became aesthetically plesant work of art and by infusing the watchmaker's personal, human touch on the movement, the watch is literally brought to life. Who wouldn't want to own such a timepiece?
It is worth mentioning that many finishing techniques require strong technical foundations. Take anglage (bevelling) as an example, it consists of bevelling the edges between the surface and the flank to form a 45° angle. The edges are pressed down and polished to give rise to its shiny profile. The bevelling needs to be done consistently so as to maintain a constant width and parallel edges. The toughest of all bevelling is perhaps the sharp interior angle, where two bevels meet but are finished in a way as if the two bevels form a continuous line.
3. Small Production Quantity
For limited edition or even unique watches, the cost could even go higher, even for brands that construct their watches using third party parts, since it costs more to source/ manufacture watch parts if you're not ordering/ producing them in a large lot.