patrickau
172
A reflection at times of uncertainty...
I personaly believe that the bubble of the watch industry is at its biggest over the last couple of years. Retail prices increase sometimes up to two times a year, and can touch 15% per increment. Over the last ten years, a lot of watches have increase two to three fold (some four) of their prices.
Some manufacturer took this opportunity to stop production of certain model and release so called 'upgraded' models so that they can increase the price even more. This way, even the prices of the 'old models' in the grey and used market can shoot up overnight. This have given many people the impression that some particular brands are good investments although their production figures can run up to tens of thousands a year.
Not long ago, I remember an AD told me that prices of watches never comes down, they only go up. Now some ADs are offering discounts that are unbelievable for watches which used to be always out of stock. Now people everywhere is discussing about price reduction.
Analysts thought the bubble burst for the Swiss watch market would be in 2008 but it did not happen. I guess we can see it coming this year. No matter what action is being taken (reduced production, reduced prices, etc), there will be an impact on the Swiss watch market.
I think due to the current economic climate, there will be interesting development in the used watch market. Many people will have to part with their watches when the economic situation does not allow them too many luxury items. Supply will overflow, and prices will drop. If a near mint watch costs much lower in price compared to a new one, why buy a new one? Or why not wait for the price to drop further? All these will hurt the manufacturers even more.
This is a time for us to rethink why we even love watches. For its ecomonic investment potential? As objects of showmanship? Status symbol? As a work of art? A tool?
Where lies the actual value of a watch? Is there any instrintic value? How is my watch actually related to the rich history of the brand? How much am I paying for the advertisement?
That being spoken, I have utmost confidence that the recovery is just round the corner. Just as it can revive from the quartz revolution, it can overcome this hurdle.
The difference is that I forsee we will have more careful, critical and mature watch lovers that know exactly what they want. And more responsible watch manufacturers to fulfill these needs.
Just my 2cents...
Pat
This message has been edited by patrickau on 2009-01-08 20:36:38
