Horological Meandering

Horolographer
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Clearly impressions differ but the one that touches the most nerves is PRICE inflation...

I was resistant to inflame the feeling here about prices but I wanted to put into perspective or reality check for watch brands - who ever is listening.

In Singapore, we have the reputation of having the worlds most expensive cars. I can only think of one city that has more expensive cars but without going into details (e.g. a Toyota Vios - costs in excess of US$40K on the road), just believe me they are very expensive here - and they have a limited life of 10 years of use. Basic economics tells us that rational people will look at opportunity cost in the use of limited resources.

Many collectors have in context of lifestyle spent their liquid cash on watches instead of cars or other luxuries because its not a depreciating asset if spent wisely (of course there are speculators who believe there is a killing to be made). There had been some nice and affordable pieces that did not hurt their pockets too badly - all in comparison with the alternative lifestyle products.

But now new pieces coming from the luxury brands are nearing the prices of cars here (again, world's most expensive cars). Then those who are rational will step back - esp. those who really understand that these items are really not investments afterall but bouyed by secondary market of those who want the pieces (that 'WANT' can easily disappear permanently when recession finally hits).

There is a theory that there is no limit how high luxury goods can escalate as the spending behaviour of the super wealthy cannot be measured within normal economic models/theory/laws. Unfortunately for the brands, the world is not populated by the super wealthy.

Yet as mentioned earlier here by others, there seem to be a irrational belief by the brands that the nouveau riche coming along whether they are new professionals in US or Singapore or even the new rich in Russia and China will readily buy up the excess output of luxury pieces. For their sake, I hope their marketing machinery works. Otherwise, I believe those who are professional and rich - who have some level of intelligence that gave them their wealth - will wake up to realise that there are other smarter ways to spend their riches on luxury.

One more time - How many high end cars are made each year? How many luxury watches made each year? How much each product take to produce and the margin of profit?

I hope the brands and new buyers will step back and do a reality check for their own sake. The sooner the new buyers pause (consider buying in the secondary market if the itch is unbearable!) and hold back the sooner the brands will stop the price inflation.

Thanks for reading this.

Cheers
Harry

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