Monday, 22 March 2010

Vintage Wrist Watches, a vibrant and buoyant market, but why are Audemars Piguet Vintage Watches so inexpensive?

The Big three classic Wrist Watch Manufacturers (or 'Manufacture d'horlogeri') are indisputably Patek Phillipe, Audemars Piguet and Vacheron Constantin, Patek Phillipe is currently owned by the Stern Family, Vacheron Constantin by the vast Richemont group and Audemars Piguet has the rare and prestigious distinction of still being run by the Original founding family since 1881, making it one of the last family owned 'manufacture's' in the world and including seiko the last Wrist Watch company owned by its original founders.

The pieces these brands produce are all of exceptional quality, and have been so pretty much since their inception, not for these great makers was the quartz revolution a cause to mass produce cheaper models and allow customers to be able to buy cheaply into them, rather they continued to produce pieces that would stand the test of time as they always had in the past.

This dedication to quality has insured that all their Wrist Watches from their back catalogue, even from this dark period of quartz domination that threatened for a time to cause the extinction of mechanical Watches, are able to still be sold and command prices that would put most modern day Watches to shame, running fully and perfectly, servicable and useable, and in the case of Patek Phillpe regularly break auction records on Vintage Watch Prices, indeed for many years Patek had the record for most expensive Watch sold at auction with the famous Supercomplication (a product of a battle between two super wealthy oligarchs to produce the most complicated watch) coming in at $11,000,000 at a Sotherbys auction, and has only now at time of writing been knocked from the top spot by a Chopard Wrist Watch sold in their stores as a 'statement' piece for $25,000,000 however the piece in question is encrusted with 201 carats of diamonds, so it is the stones rather than the movement that has created the price.

And finally these three brands continue year after year to produce groundbreaking complications that redefine what a Mechanical Wrist Watch can do, examples are the PatekPhillipe Sky Moon Tourbillion, the Vacheron Constantin Tour de I'lle and Audemars carbon concept tourbillon chronogtaph, all commanding prices of between $750,000 and $2,000,000.

So it is these three brands I wish to discuss with respect to making my point about the vintage watch market after all there are many other brands out there that are in the marketplace, most significantly Rolex which is the benchmark of vintage watch value, but patek, vacheron and audemars are really the three brands that stand out in the world of 'manufacture' as the classics and the best.

So now onto my point (finally) all things being as they are with respect to these oustanding brands, there is an anomoly to be found within the collectors market, the anomoly is the fact that Patek phillipe watches command much higher prices than Vacheron and Audemars ones, Vacheron occupying second place and Audemars last.

An average Patek from the 1950s will not be found even on an auction site like eBay for less than £3000,$4500,€3300, a Vacheron for £2500,$3300, €2700 and Audemars lags far behing the leader at around £2000, €2200, $2700, it almost goes without saying that a good excellent or rare example of any of these brands can be in the tens of thousands, however a poor example of a patek will still not go beneath around £1500, €1650, $2200, a poor vacheron or audemars though can fall as low as the sub £1000,€1100, $1600 price range.

Why the startling and significant price differences? all are the top three brands in the world of horology, all bear the prestigious geneva seals, all are hand made Wrist Watches that command Thousands new and with the exception of vacheron are all family owned 'manafacture's'.

It is sadly a byproduct of the collectors market, all collectors markets are exactly that - markets of people who collect things, the prices of the items on a collectors market are driven exclusively by how much people are prepared to pay, just like another larger market we have all come to know and hate, the stock market, if no-one want the product, then no-one will pay the big prices. And you see Patek Phillipe produced and produces many more wrist watches than did Vacheron and Audemars, I once read a statistic that put the number of Wrist Watches made by Patek in a given year of the 1960's at arounf 22,000 , the number produced by vacheron at around 12,000, and audemars was the lowest at around 3,000.

Therefore having more watches out there to collect, twinned with Patek's perceived elite brand level, allows for a healthy collectors market of the Vintage pieces, there is so much more fun for collectors to have than for example with Audemars where a collector may have to spend years trying to find any one rather than having a abundance of choice and hunting for one special piece that one particular one to complete the collection.

This factor is one which has propelled Rolex's vintage and modern prices into the stratosphere, they produce around a 1,000,000 Watches per year, which leaves collectors with a lot of choice, and with the marketing division working hard to impress upon us all how aspirational a product it is prices skyrocket (god I would love just one millionth of Rolex's marketing ability).

of course this can work in the other direction, flood the market with too much stock and the prices also decrease, just like the cocktail hour, too litle prices go down (and your not drunk), , too much prices go down (and you fall on the floor), patek phillipe have managed by luck or judgment to have just enough watches out there to have a healthy collecters market, and the right marketing to make every collector want them, vacheron and audemars less so (in quantity solely qaulity and brand perception is unquestioned)

So what is the final result of this? On the positive side, the chance to snap up the finest quality vintage Wrist Watches at excellent prices, Vacheron and Audemars will never be 'cheap' even old or new, and the prices will always do nothing but rise, they are after all the best so increase is all they can do, however they will never match the prices of their more prestigious cousin Patek Phillipe, or their more prolific bastard twice removed cousin rolex, after all you simply cant produce more vintage 1960's watches.

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