Unreasonable price increases and paying more for less

[Jim Dollares]

Interesting reading the latest 'grinding gears' on ABTW. This time about price increases and paying more for less and how Chinese manufacturing limits the brands' ability to engineer new daring things

https://www.ablogtowatch.com/grindi...is-much-to-be-this-bored-with-luxury-watches/

Funny that he highlights the fact that a full ceramic tourbillion is cheaper than a steel one on leather strap

 

[bpsmith]

Excellent. I feel like it’s something I could have written. lol.

There’s nothing in there that I disagree with, especially the final paragraph.

 

[Jim Dollares]

Imagine hodinkee publishing something like this

 

[Aquagraph]

 

[bpsmith]

You missed the bit which followed…

 

[Jim Dollares]

Aquagraph

Tirelessly fulfulling these duties? It is obviously in the past when TAG aimed for this position

 

[Aquagraph]

Exactly.

 

[Jim Dollares]

Relatively affordable Swiss-made watch. Is there any brand that fulfills this these days? Perhaps Tissot and other Swatch brands like dat

 

[Jim Dollares]

OTOH, besides assembly, how much of a Tissot is actually Swiss

 

[bpsmith]

Jim Dollares

OTOH, besides assembly, how much of a Tissot is actually Swiss

At least 50% of it, allegedly, plus assembled and tested there. Another website suggests that at least 60% of the manufacturing costs are incurred in Switzerland. That’s easily done these days, with ultra cheap components from China.

 

[Jim Dollares]

Percentage of the value is such bs indeed, got to love Switzerland and their schemes

 

[bpsmith]

It was from a Google, so comes with the usual warnings, but I totally agree if that is true.

Sooooo easy to achieve when sourcing stuff from an ultra cheap supplier like Chiba and then adding silly high Swiss manufacturing costs.

 

[paysdoufs]

Jim Dollares

Percentage of the value is such bs indeed, got to love Switzerland and their schemes

You can compare that to other European countries’ “Made in” regulation (France, Germany, etc…) and the Swiss one will look like the posterboy of transparency!

 

[paysdoufs]

But yeah - dropping a CH movement - in Switzerland - into an otherwise CHN-made watch is enough to qualify for “Swiss Made”. Works for me, TBH. And you’ll still get access to a local after-sales service.

 

[Jim Dollares]

ABTW continues their refreshing streak of challenging the Swiss (pricing) madness well worth a read

https://www.ablogtowatch.com/ariels...xury-watch-brands-should-keep-raising-prices/

when consumers notice that prices keep going up, it pressures them to buy since they are concerned that prices will keep going up. Brands hope to instill a sense of “buy it while I can still afford it” mentality in consumers

 

[Jim Dollares]

[...] established luxury watch brands are normally selling to people who chose that brand because it represents the top of their spending ability, meaning that most consumers buying a luxury product tend to reach as high as they can from the outset. They normally don’t underspend on luxury goods because doing so doesn’t deliver the emotional kick they want out of the purchase. Accordingly, when brands raise their prices, they end up alienating a large part of their existing customer base [...]

[...] implication is that when brands raise their prices these days, they often have to look for an entirely new customer base. That means the cost and time of forming brand-new relationships with customers and demographics, and probably needing to apply patience while getting to know a new consumer mindset [...]

 

[Jim Dollares]

It will be interesting to see TAG Heuer's market position in five years when I can no longer afford their products

 

[Aquagraph]

You will still be able to afford their products. Just pre-owned. Now that you have embraced the pre-owned market a whole new world is opening up to you.

 

[Jim Dollares]

Aquagraph

You will still be able to afford their products. Just pre-owned. Now that you have embraced the pre-owned market a whole new world is opening up to you.

So you have no issue with a continued 10-15% price increase per year?

 

[imagwai]

Are you thinking that TAG are trying to move away from being people's "first nice watch"? I think they'll probably continue their strategy of trying to be the Swiss entry point, as well as stretch the brand up to tourbillons, gold and diamonds. If Jim can no longer afford any of TAG's products in 5 years, then something will either have gone badly wrong for his career, the Swedish economy, or TAG itself.