What Makes This Watch so Expensive?

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May 16 (Bloomberg) –- Audemars Piguet North America CEO Xavier Nolot discusses why his company’s Royal Oak Concept GMT Tourbillion watch has an asking price over $200,000. He speaks on Bloomberg Television’s “Street Smart.” (Source: Bloomberg)

Watch.

It looks like a large house on my arm.

How much is it worth?

200,014 -- $214,000. who still wears a watch?

The watch like this became a status symbol, an appreciation of tradition and what we are doing.

More and more people after the invention of the quartz started to wear the.

M. what makes them so happy and -- heavy and expensive?

It is made out of titanium.

What makes it so expensive as the technology inside.

This is the manual work who has been done by our people.

It takes about three months to assemble such a watch and any more months to get the different parts in those materials.

This is white ceramic?

The white band is white rubber, but the face is white ceramic.

It is about nine times harder than steel.

So it takes as much time to do it is to machine a dial.

It takes about eight hours to do that bevel.

It takes much more time, and cost more money, need more precision.

The finishes are harder to get.

If i'm paying $214,000 for this watch, what are the margins?

They are not that tight because, in the u.s. we're going to get five of those this year.

There is no economy of scale.

It is very exclusive, very rare, the price comes from our regular margins.

The price went up in the u.s. today.

Yes.

We hear a lot about affordable luxury where this is hot.

This is not affordable luxury.

What has been the demand?

In luxury market you need to distinguish between what is becoming a little more mass, and what is really niche luxury.

We belong to the second category.

We differentiate ourselves by the fears of the of the product -- scarcity of the product.

We cannot produce more than what we are doing.

Because of the craftsmanship required to do what we do.

All only the demand -- only demand has been going up, capacity has not.

Meaning that we are not affordable luxury, we cannot find us.

Thank you so much.

That is all.

This text has been automatically generated. It may not be 100% accurate.

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