or is the quality that high somehow?

They are luxury goods, and the pricing of luxury goods is never based on actual manufacturing costs.

The quality of a Rolex is high for a mechanical watch, however, it isn't any higher than some other luxury watches that cost a fraction of the cost.

The price of a watch doesn't scale with quality. After about $1000, the price tends to be more for tiny extras, image, and other intangible elements.

This is excluding watches that are made in extremely low numbers or are highly complicated. The pricing of these can be arbitrary too, but they are made differently than something mass produced (Rolex watches are mass produced).