Patek production ramping up?

[Rolexatlast]

Latest video from Opusntime claims Patek have opened a new facility, and will increase production by 3x to 5x.

Such a step-change in production must have a material impact on availability and the grey market.

Do we think this is correct?


https://www.youtube.com/watch?v=Bz7T7ucor-0

[HMHM]

Ahhh yes! The guy who apparently bought a 16202 on walking in.

[Russell996]

Originally Posted by Rolexatlast

Latest video from Opusntime claims Patek have opened a new facility, and will increase production by 3x to 5x.

Such a step-change in production must have a material impact on availability and the grey market.

Do we think this is correct?


https://www.youtube.com/watch?v=Bz7T7ucor-0

The facility was opened in 2019. You are 4 years late to the party.

[maecenas]

So they decided to jump from about 60k watches a year to 180-300k? After Thierry saying in every interview ever that he didn’t want to/couldn’t ramp up more that a few percent per year?

Lol. I don’t know who’s video you’re referencing, but I wouldn’t waste my time with it…

[kh428]

I think I also read that this was not to ramp up production but to have a better flow and control for the quality of their timepieces.

[GoingPlaces]

Originally Posted by Rolexatlast

Latest video from Opusntime claims Patek have opened a new facility, and will increase production by 3x to 5x.

Such a step-change in production must have a material impact on availability and the grey market.

Do we think this is correct?


https://www.youtube.com/watch?v=Bz7T7ucor-0

3-5x? I have a bridge to sell.

[lawyerdude]

I can’t imagine real estate was standing in the way of making more watches. I would have thought watch makers. Plus, Stern has repeatedly said he doesn’t want to be an AP dependent on Nautilus and Aquanot.

[dauster]

Just read an article in revolution watch stating that they estimate a 30% increase in production due to the new faciity. Officially the the new factory was built to streamline and not to increase production but 30% seems reasonable.

about 20k more watches seems possible. probably not immediaelty but over the next years

[John Doyle]

I doubt this is true. Patek really tries to control production + if they can sell most of what they produce, why change a winning formula?

[Partekular]

I suspect that a HUGE percentage of PP profit is generated by 5 year servicing of every watch PP has ever sold. 60,000 x £1500 (?) pa? As sales continue so does the requirement for increasing the facilities to do this.

There is also the small matter of increasing robotic production, assembly and first finishing to get around the difficulty of shortages of highly skilled staff and the move to make all the various production steps in-house. “Hand finished” is not the same as “Hand Made” and I would guess/suspect that there is a necessary slippery slope between one and the other. So many possible reasons why a larger factory does not necessarily mean a larger increase in output. Incremental, yes but double it or trebling? Leave that to the Rolex market!.

[codecow]

I don’t think they’re making much profit on service.

[bob101]

They sold around 68,000 pieces in 2022 when factory already open so seems very unlikely it will increase much beyond that.

[Partekular]

Originally Posted by bob101

They sold around 68,000 pieces in 2022 when factory already open so seems very unlikely it will increase much beyond that.

That’s very interesting. Where did the data come from?

[taylorhall]

Despite an increase in production, ADs will not change the perception of scarcity.


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[Ichiran]

Originally Posted by dauster

Just read an article in revolution watch stating that they estimate a 30% increase in production due to the new faciity. Officially the the new factory was built to streamline and not to increase production but 30% seems reasonable.

about 20k more watches seems possible. probably not immediaelty but over the next years

Which article is that please? I'm surprised at your 30% because in the recent July 2023 article from Revolution, the production number was just 66,000, which was lower than the commonly known figure of 70,000. In the same article - "As emphasized by the brand, the primary aim of the new PP6 facility is not to augment production volume significantly, but rather to optimize manufacturing processes under one roof while also enhancing production capabilities for their complicated and Rare Handcrafts watches."

We are now 4 years after the new PP6 has opened.

https://revolutionwatch.com/patek-ph...6-manufacture/

[dauster]

Originally Posted by Ichiran

Which article is that please? I'm surprised at your 30% because in the recent July 2023 article from Revolution, the production number was just 66,000, which was lower than the commonly known figure of 70,000. In the same article - "As emphasized by the brand, the primary aim of the new PP6 facility is not to augment production volume significantly, but rather to optimize manufacturing processes under one roof while also enhancing production capabilities for their complicated and Rare Handcrafts watches."

We are now 4 years after the new PP6 has opened.

https://revolutionwatch.com/patek-ph...6-manufacture/

It’s from this hard copy of revolution watch - the 30% is just a number they toss around at the end of the article as an example. See last screenshot.
But they say 68k watches produced in 2022 earlier.






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[Ichiran]

Originally Posted by dauster

It’s from this hard copy of revolution watch - the 30% is just a number they toss around at the end of the article as an example. See last screenshot.
But they say 68k watches produced in 2022 earlier.

Thanks. The mag wordings appears finger in the air from Revolution. They are probably worded this way to justify the desirability of Patek watches. It doesn't look like their estimates too.

[GGGMT]

Originally Posted by Ichiran

Thanks. The mag wordings appears finger in the air from Revolution. They are probably worded this way to justify the desirability of Patek watches. It doesn't look like their estimates too.

Totally agree. Magazine language is speculation. Like, saying ‘grey market pricing would rebound if Rolex decreased production by, say, 20% next year.’ Silly


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[John Doyle]

Who still reads revolution or listens to wei koh...

[Partekular]

For what it’s worth I think if Patek increase production too much they will lose their ‘hand made - now hand finished - USP. They will try and retain it with the ultra complications where skilled hands are required throughout but risk losing the gloss if punters even sense machine production is increasingly behind their purchases. There are a plethora of brilliant small hand made watch makers in the wings desperate to attract collectors at the upper end of the luxury market.

Look for example, at the fuss made at the suggestion the 5320 case was stamped out, not hand cut and the rapid response in defending this “new” production technique -

https://www.hodinkee.com/articles/pa...se-closer-look

PP buyers are clearly a sensitive bunch paying a premium for hand made quality… of necessity a limited production is inevitable.

[brandrea]

IMHO if Patek were to increase production by the numbers quoted here, there is no direct line between more watches sold = more profit.

At least, this has been my experience in my own business.

[londonpilgrim]

A few of the lists opened again (briefly) last week, so this seems to bear out.

[Partekular]

Originally Posted by londonpilgrim

A few of the lists opened again (briefly) last week, so this seems to bear out.

Please expand and explain.

[Partekular]

Originally Posted by brandrea

IMHO if Patek were to increase production by the numbers quoted here, there is no direct line between more watches sold = more profit.

At least, this has been my experience in my own business.

Doesn’t that depend upon the margin? The 5811 (which I would buy if only it were possible) has whacked up the price enormously as Mr Stern himself said, to reduce availability and increase margin. With such high demand for PP’s the easy route is across the board is price hikes for Nautilus and Aquanaut to attempt to reduce demand and increase profit. If he can do that and increase sales by 10%… = much more profit?

[londonpilgrim]

Originally Posted by Partekular

Please expand and explain.

My AD runs a list and there were a couple of pieces on which the lists were closed but opened again - on a couple of Nautilus. (I presume on the say so of PP)

[brandrea]

Originally Posted by Partekular

Doesn’t that depend upon the margin? The 5811 (which I would buy if only it were possible) has whacked up the price enormously as Mr Stern himself said, to reduce availability and increase margin. With such high demand for PP’s the easy route is across the board is price hikes for Nautilus and Aquanaut to attempt to reduce demand and increase profit. If he can do that and increase sales by 10%… = much more profit?

Profits depends a variety of factors in addition to margins including, operating efficiencies, cost of capital, taxes, etc etc.. An increase in production output in an of itself doesn't guarantee anything.

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[Partekular]

Originally Posted by londonpilgrim

My AD runs a list and there were a couple of pieces on which the lists were closed but opened again - on a couple of Nautilus. (I presume on the say so of PP)

Interesting but may mean buyers have refused offers and withdrawn from waiting lists rather than production having been increased?

[dauster]

Originally Posted by Ichiran

Thanks. The mag wordings appears finger in the air from Revolution. They are probably worded this way to justify the desirability of Patek watches. It doesn't look like their estimates too.

you might be right - as much of a fan I am of patek, this artcle was definietly a puff piece just singing the praise

[londonpilgrim]

Originally Posted by Partekular

Interesting but may mean buyers have refused offers and withdrawn from waiting lists rather than production having been increased?

Yeah, could be, who knows how it works

[sampelligrino]

I have a hard time believing PP which I view as the most prestigious and "holy" of the watch brands would build to explode production capacity as referenced here, I'd imagine they want as much perceived scarcity for the brand as possible to maintain the allure of desirability