Fine Watchmaking Market Map

I stumbled across a phenomenal article on the website “WatchesBySJX” that broke down watch production into a measurable metric called “watchmaker-hours per watch”. The writer added Swiss, German, and Japanese national statistics for working hours to calculate the maximum possible number of watchmaker-hours per watch for more than 50 luxury watch brands.

The writer is quoted as saying the following: “The watchmaker-hours metric is not the number of hours that a watchmaker spends on every watch. Rather, it’s the theoretical maximum number of hours that a brand’s watchmakers could possibly spend with each watch. This workrate can be viewed as a simple proxy for the amount of human involvement that each individual watch can get during the production process.”

So, with this information let’s dig into the data of some well known brands from the very top of the market down to the “plebeian” luxury brands.

The writer labels the very top “The Peak” The brands below are the crème de la crème and many have closed their order books.

The article states- “At the highest level of watchmaking, brands produce fewer than five watches per employee per year, resulting in an average of 834 watchmaker-hours per watch across these 15 brands.”

Ferdinand Berthoud listed at the very top and is able to invest up to 643 watchmaker-hours in each watch. But this is the max-not the average. For context, the 15 brands shown above make less than 500 watches per year, combined. In contrast, Rolex alone produces more than 2,000 watches every day!!

“Artisinal Industrial”

The next rung on the ladder is labeled Artisinal Industrial and is dominated by ALS & F.P. Journe.

I have a buddy with almost a half dozen Laurent Ferrier’s and I totally understand the level of craftsmanship that goes into one of those watches. I’ve also handled Lange & Journe and for commercially produced brands, their finishing is top notch. The writer is quoted as saying “Lange and Journe are the most artisanal, with capacity for up to 212 and 264 watchmaker-hours for each watch, respectively.”

“Industrial Haute Horlogerie”

The next batch is where most of the high end brands that live in the popular conscious reside.

This batch was the one that initially surprised me the most and I’ll tell you why- Glashütte Original!! I would never have guessed that they would be lumped together with the likes of Patek, AP, VC, Richard Mille, Breguet, Blancpain, H. Moser, L.U.C. Chopard, Parmigiani Fluerier, Habring & Piaget! That legit blew my mind and is the reason why I’m making this post.

But first I wanna touch on a topic the article raised regarding the Holy Trinity with Patek & AP as the main topic of discussion. It’s quoted as saying “Patek Philippe employs 1,600 staff and produces about 68,000 watches per year, suggesting a maximum of 38.6 watchmaker-hours per watch. Looking at Patek’s mechanical watch production only, this number gets closer to 50 but still lags behind most rivals. This is important because it helps explain some of the choices the brand makes in its finishing.”

It continues “For example, many collectors lamented the absence of any sharp inner angles on the new 5236 perpetual calendar. But the fact is that an average of less than 50 watchmaker-hours per watch is just not enough to add these kinds of sought-after flourishes to every watch, forcing the brand to ration these embellishments to their more elite pieces.”

This was helpful in illuminating how and why Patek incorporates certain finishes in some but not all their watches. It’s simply not possible with the labor force that’s available.

This brings us to AP which the article discusses in the following paragraphs- “In contrast, Audemars Piguet currently produces about 48,000 watches per year with about 2,000 staff (up to 72.9 watchmaker-hours per watch). Even this impressive number requires rationing of inner angles, though they can be found abundantly relative to Patek.

Audemars Piguet recently announced plans to increase production to about 65,000 watches per year by 2027. It will be interesting to see how the brand meets these growth targets; were they to achieve this increase in volume with their current headcount, it would dilute their workrate closer to where Patek Philippe is today.”

I think it’ll be interesting to see where these haute horology brands go in the future as I believe there are less and less people being trained as watchmakers yet more people are becoming involved in the hobby. Perhaps that’ll push more young people to choose watchmaking school and I hope it does, as I would love to see a continuation of these artisanal techniques passed down so that we can continue to enjoy them in the decades to come.

“Industrial Fine Watchmaking”

The next rung down also had some surprises but not all of them necessarily good. I would’ve thought JLC was in the same class as the Holy Trinity, Blancpain, Piaget & Parmigiani Fluerier. But I guess I was wrong. The writer succinctly explains JLC in the following- “I expected to see Jaeger-LeCoultre in the 30-99 range, but the brand’s production of 95,000 watches per year and headcount around 1,200 suggest a maximum of 20 watchmaker-hours per watch. The brand’s technical know-how is evident in the fact that it is able to produce so many watches with finishing (in its core range) on par with rivals like Glashütte Original, while also producing a wide variety of unusual complications like the Reverso Tribute Gyrotourbillon that clearly benefit from many hours of hand finishing.”

I was also surprised by Nomos. The writer goes on to say “Nomos is a standout brand in this category due to its low average price point. Nomos benefits from the same “Glashüttenomics” as Lange and Glashütte Original, with lower labor costs than in neighboring Switzerland. This means the brand can afford to invest more watchmaker-hours in each piece, raising the level of craftsmanship (and also value) compared to similarly priced Swiss rivals.” They punch way higher than I thought! I just never expected them to be along side Girard Perregaux, Bulgari & Ulysse Nardin! Those are some serious Maisons!

“Industrial Prowness”

This is where the big boys reside.

Here you have your standard luxury watch brands that produce copious amounts of watches per year. Most of the popular brands here get by with only 3-6 watchmaker hours per watch. GS was most surprising to me with only 3.6 watchmaker hours per watch and a production of only 45k watches a year. 45k watches a year makes you think they would spend more time per watch but apparently they do not.

Watchmaker- Hours per dollar

This is where it gets really interesting in my opinion. I’ll let the writer explain in their own words again:

“The watchmaker-hours metric can also be combined with price data to visualise clusters of brands that offer similar levels of craftsmanship value. This graph helps illustrate which brands have more pricing power in the market and can charge the highest prices on a watchmaker-hour basis.

This is why I wanted to share all this info. It all comes together in the following two graphs.

“Glashütte Original is the standout value king, charging a mere US$78 per watchmaker-hour. Comparing the “big three” brands, Patek Philippe’s watches are priced at US$773 per watchmaker-hour, compared to about US$540 for Audemars Piguet and US$408 for Vacheron Constantin. Lange and Journe clock in at US$198 and US$225, respectively.”

The next graph excluded Lange and Journe as they are extreme outliers and it’s lets you get an even clear picture.

As you can see, GO is uniquely positioned in a value area that few other brands can match. They incorporate an extraordinary amount of watchmaker hours per watch at an extremely low price tag relative to the amount of hours involved in producing it. As the proud owner of PanoMaticInverse, I was stunned to see how good a choice I made at the jeweler the day I bought it!! 😅😂💸 But seriously, all this data reinforced my love for Glashütte Original and gives me solid evidence to support my claim. “Glashuttenomics” is very real! Look at how Nomos punches above their weight. And ALS is able to provide phenomenal hand craftsmanship for much less per watchmaker hour ($178) than Swiss rivals Patek & AP.

So, what do you guys think? Does this give you new insight on how to categorize the different luxury brands? It opened my eyes immensely.

https://watchesbysjx.com/2022/11/watchmaking-market-map-2022.html