Luxury Swiss watchmaker Rolex looks to accelerate production to meet rising demand

Luxury Swiss watchmaker Rolex is gearing up to create three temporary production facilities that will begin churning out luxury watches in 2025. The world's largest producer of high-end timepieces is seeking to boost production amid an unprecedented rise in demand for its products, reported Bloomberg on Monday.

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Construction on the facilities will start later this year, said the report. The development comes after plans of spending 1 billion Swiss francs ($1.1 billion) on a major new production site in Bulle, a municipality in Fribourg, Switzerland, that is expected to commence operations in 2029.

Work on a 9,000 square meter facility in Romont, Switzerland will commence in the second half of 2023, with production expected to start in 2025.

There will also be a temporary facility at the Vivier SA industrial park in Villaz-Saint-Pierre that will begin operating in 2024 plus a recruitment center in Bulle.

The plan for the production increase acceleration and temporary facilities was first reported by Fribourg newspapers La Gruyère and La Liberté.

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Rolex said production lines will be installed gradually with a staggered recruitment process that could reach 250 to 300 workers, the majority of which will be new employees.

“The new production site in Bulle, just like these three temporary installations, will allow Rolex to expand its production capacity, support growth and meet ever-increasing demand,” the company was quoted as saying by Bloomberg.

Rolex is controlled by a foundation named after its founder Hans Wilsdorf and produces about 1 million watches a year, generating sales of around 8 billion Swiss francs, according to Morgan Stanley estimates.

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At the moment, new watches are unavailable for immediate purchase through the company’s authorized network, leaving dealers like Watches of Switzerland Group to resort to waitlisting potential buyers.

This has also been causing a significant surge in secondary market prices that has seen popular models, such as the Daytona Cosmograph, trade at values well above retail.

Earlier this month, Bloomberg reported that prices for luxury timepieces such as Rolex, Patek Philippe and Audemars Piguet appreciated by an average of 20% a year since mid-2018, outpacing the S&P 500 Index, as values for pre-owned luxury timepieces surged.

Last year, it was reported that Rolex will begin issuing certificates of authenticity to authorised dealers selling its pre-owned watches, a move seen as giving the Swiss company more oversight of its products and stirring up the $20-billion market for secondhand luxury timepieces, amidst soaring demand.

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