Royal oak pricing?

[ILikeTacos]

Hello all,

I'm sure we are all aware about PP Nautilus prices increasing significantly (both primary and secondary markets). This seems to have gotten more people interested in the Royal Oaks and Royal Oak Chronos. While the 15202 was always popular, the 41mm models are becoming more popular and harder to get than before as well.

Do you guys think we are also going to see an increase in the MSRP for RO/ROC? With the 5 year roadmap to close all ADs + in-house movement for ROC at some point, do we see it pushing north of $30k to acquire in a couple years?

Let the speculation commence!

[tyler1980]

I do think that demand isnt rising to the extent stock levels make it appear for the SS. They are restricting inventory, especially to AD's. You can get a 15400 still without much wait.

price increase is possible for SS, not PM. That would shock me. My AD has I serial number 15202, 15400 in RG. I know for sure the 15400 is an I and i think (not 100%) that the 15202 is too. So they have been there forever. I could get it at 35-40% off if i combined discount with a VAT refund for the 15400. If prices went up they would sit even longer. They are awesome watches, i just think buyers are limited in PM.

If a SS VC overseas chrono with an in-house movement retails at $37k (£27,100) in the UK then a ROC with an in-house movement shouldn't be less. Although the VC price is way high, thats the benchmark IMO.

[kingofthehill]

Originally Posted by tyler1980

I do think that demand isnt rising to the extent stock levels make it appear for the SS. They are restricting inventory, especially to AD's. You can get a 15400 still without much wait.

price increase is possible for SS, not PM. That would shock me. My AD has I serial number 15202, 15400 in RG. I know for sure the 15400 is an I and i think (not 100%) that the 15202 is too. So they have been there forever. I could get it at 35-40% off if i combined discount with a VAT refund for the 15400. If prices went up they would sit even longer. They are awesome watches, i just think buyers are limited in PM.

If a SS VC overseas chrono with an in-house movement retails at $37k (£27,100) in the UK then a ROC with an in-house movement shouldn't be less. Although the VC price is way high, thats the benchmark IMO.

I thought your AD was so restricted in AP stock they demoted the brand from the main window to the floor level one...perhaps they are being punished for failing to hit targets.

[2nastie]

All I know the last time I was quoted 15400 (after I bought mine) was $26K CAD (taxes in) at my AD. That would equate to roughly $18.5k USD before taxes and exchange rates. They sell the SS out like hot cakes and doesn't expect too much inventory in the near future. They didn't say much but they alluded to the prices increasing...

[BawlaDK]

Right now for me one of the best buys on the used market in terms of Royal Oak – are the 39mm ROC’s…They can still be found at ”reasonable” prices…. But that wont last

The 26300 is in my book the 2nd best Royal Oak ever produced, only surpassed by the post 2015 15202 which to me is the best

[krh7]

Originally Posted by BawlaDK

Right now for me one of the best buys on the used market in terms of Royal Oak – are the 39mm ROC’s…They can still be found at ”reasonable” prices…. But that wont last

The 26300 is in my book the 2nd best Royal Oak ever produced, only surpassed by the post 2015 15202 which to me is the best

I like these too. which dial/configuration do you like best?

[Rachdanon]

I think ROC buyers are a separate group from ROs. 2 very different watches and shouldnt be part of the equation.

Indeed Patek raising prices may push some to AP, and I can't help but draw comparison to Omega and Rolex, where Omega will never scratch the brand-recognition itch that Rolex does. Only difference is that AP is together with Patek in the baseless holy trinity which puts them in the same league :-)

[AK797]

Originally Posted by Rachdanon

I think ROC buyers are a separate group from ROs. 2 very different watches and shouldnt be part of the equation.

Indeed Patek raising prices may push some to AP, and I can't help but draw comparison to Omega and Rolex, where Omega will never scratch the brand-recognition itch that Rolex does. Only difference is that AP is together with Patek in the baseless holy trinity which puts them in the same league :-)

In this recent consolidation, AP and PP have also spread apart, this even shows on this forum with incomings, as PP have taken a lot more business and probably more kudos.

[arosado]

Less ADs = higher prices.

[kingofthehill]

Audemars Piguet's CEO has previously noted that the manufacture is fully selling through its annual production of 40,000 units. The manufacture's adjustments to the product and production mixes have moved the average sale price higher, increasing revenues (and presumably profits).

The manufacture's CEO has recently spoken of the near-term production quota review. Following recent upward pricing adjustments from Patek Philippe and Vacheron Constantin, I believe that Audemars Piguet has an opportunity to maintain the current annual production volume and move to further revenue and profit growth through higher product prices, direct sales and reduced discounts. I am also generally supportive of their plans to move into secondary market sales, which will add further to their revenue and profits.

The 15450ST/15400ST should broadly be priced against the 5167A, the 15202ST against the 5711/1A and the 26331ST against the Vacheron Constantin Overseas (once the piece has adopted the long promised in house chronograph mechanism).

With the growing quota of women's models and the long-promised new line, the reduction in supply of such Royal Oak models would likely shift the supply-demand balance out of alignment and create similar dynamics as seen by certain Patek Philippe pieces of late. This should not necessarily be the goal of these manufactures, but it is clear that such dynamics support price increases and are therefore for now - in the context of a growing base of potential buyers - something that manufactures are willing to pursue.

[gsg]

Originally Posted by kingofthehill

With the growing quota of women's models and the long-promised new line, the reduction in supply of such Royal Oak models would likely shift the supply-demand balance out of alignment and create similar dynamics as seen by certain Patek Philippe pieces of late. This should not necessarily be the goal of these manufactures, but it is clear that such dynamics support price increases and are therefore for now - in the context of a growing base of potential buyers - something that manufactures are willing to pursue.

This could certainly be the case through 2019, but the CEO has also mentioned that AP is expecting to increase production in 2020 which could potentially lessen the supply/demand imbalance.

[kingofthehill]

Originally Posted by gsg

This could certainly be the case through 2019, but the CEO has also mentioned that AP is expecting to increase production in 2020 which could potentially lessen the supply/demand imbalance.

Indeed, but given the opportunity to increase prices that the broader market has presented, I believe they would focus there first - especially given how well received the fixed production policy has been. Increasing prices at the current production will also come at a greater overall margin (as they will not need to invest to increase their capacity) and is a more resilient policy than having a higher annual production to sell.

[texasmade]

All those moves are great right now when the economy is doing well but what happens in the next recession when people aren’t going to pay those inflated prices? They’re going to end up being stuck like Richemont and destroy inventory or massively discount.

[kingofthehill]

Originally Posted by texasmade

All those moves are great right now when the economy is doing well but what happens in the next recession when people aren’t going to pay those inflated prices? They’re going to end up being stuck like Richemont and destroy inventory or massively discount.

I have noticed manufactures are increasingly adjusting their product mixes to cater to conventional tastes in so-called 'new markets' and I believe that manufactures such as Audemars Piguet or Patek Philippe believe that their annual production can readily be consumed in more or less any market environment; as both companies CEOs have mentioned they only need to find a relatively small number of buyers in the context of the global mass-affluent each year - a category that is itself rapidly expanding. In the end, that trend may well price out an increasingly number of 'conventional' (read historic) buyers over time.

[Amiroo]

Originally Posted by texasmade

All those moves are great right now when the economy is doing well but what happens in the next recession when people aren’t going to pay those inflated prices? They’re going to end up being stuck like Richemont and destroy inventory or massively discount.

Exactly. This is something almost no one considers. A broad range of asset classes are priced very high (or overpriced some argue) and this leads to things like watches, Porsche GT3's or Birkin bags to also be overpriced. How many people do we know who've seen their stock holdings or their homes increase significantly over the last 7 years and say to them selves, "Well my house was worth $1mil, now its worth $1.65Mil, I'll buy a SS watch for 30K no problem"...

[Rachdanon]

Let's not forget the internet is erasing borders and making the world one. Indeed the disparity and uneven distribution of wealth is becoming less an issue. Getting the 40,000 pieces to the right hands has become easier. Hence getting higher prices is easier for the watch companies.

An this effect of the internet is pervasive, not just for watches.