Automotive Retail:

Budget Process

Automotive Retail:

Budget Process Chart 2

The following summary describes the budget process within the automotive retail business involving executives and in close exchange between commercial management as well as general management. The budget process with joint development of ambitioned but achievable objectives, personal commitment of executives, guaranteed goal achievement through incentive payments as well as follow-up’s via monthly business reviews, is an essential instrument of cooperative business management.

Michael Kuloge / April 2014

Automotive Retail:

Budget Process Chart 3

Information for Executives

Commercial Management: Informing the executives about content, structure and time frames of the budget process

Sep Okt Nov Dez

Automotive Retail:

Budget Process Chart 4

Budget Process – Structure and Procedure

Informing the executives

Actual analysis and forecast talk

rounds

Volume suggestions

by executives

Cost suggestions

by executives

Rough cost planning by

financial accounting

Budget suggestion by

financial accounting

Budget Meetings

Final conversations

Commitment of executives

Budget decision

Follow up through monthly business reviews

Follow up through monthly business reviews

Follow up through monthly business reviews

September October

November December

Automotive Retail:

Budget Process Chart 5

Actual Analysis and Forecast

Commerical management and general management including executives: Evaluation of current results via 3rd quarter as well as forecast via 4th quarter of the current fiscal year in separate department talk rounds

Sep Okt Nov Dez

Automotive Retail:

Budget Process Chart 6

Part 1: Preparatory Inquiries

Commercial Management: Handover of first part of the preparatory inquiries to executives of each department including: Volume planning Marketing planning, personnel and

investments Planning of measures

Sep Okt Nov Dez

Automotive Retail:

Budget Process Chart 7

Volume Planning

Executives: Development of proposals regarding revenue planning for each department New cars, especially after model denomination, with margin-, credit- and estate planning under consideration of possible new introductions as well as discontinued models and potential facelifts Used cars, separately by type of business and the gross profits Service with turnover and gross profit

Sep Okt Nov Dez

Automotive Retail:

Budget Process Chart 8

Marketing Planning, Personnel and Investments

Executives: Preparation of proposals for the planning of marketing activities, intended or actual personnel changes and necessary new or replacement investments for each department

Sep Okt Nov Dez

Automotive Retail:

Budget Process Chart 9

Planning of Measures

Executives: Preparation of proposals of the essential measures to ensure the achievement of budget plans for each department. Distinction according to general measures as well as measures to increase in sales, the gross profit improvement and cost reduction Accompanied by a short explanation, assignment of a person in charge, a start and ending date and, when possible, the estimate earnings contribution to the achievement of the budget in Euro

Sep Okt Nov Dez

Automotive Retail:

Budget Process Chart 10

Rough Cost Planning

Financial Accounting: Acquisition of the planned marketing activities, staff changes and investment expenses, and development of rough cost planning based on the volume of proposals of executives for each department

Sep Okt Nov Dez

Automotive Retail:

Budget Process Chart 11

Part 2: Cost Planning

Commercial Management: Handover of the second part of the preparation inquiries to the executives per department: Cost planning

Sep Okt Nov Dez

Automotive Retail:

Budget Process Chart 12

Cost Planning

Executives: Proposal development for cost planning of each department based on the rough cost planning of financial accounting

Sep Okt Nov Dez

Automotive Retail:

Budget Process Chart 13

Budget Proposal

Financial Accounting Summary of the different proposals for revenue and cost planning and development of a budget proposal for the coming fiscal year

Sep Okt Nov Dez

Automotive Retail:

Budget Process Chart 14

Budget Meetings

General management and commercial management with executives: Presentation of individual budgets in the overall context in separate meetings (new cars, used cars and service) Coordination, if necessary, adjustment and agreement of the time being final plan size General management and commercial management with shareholders: Final coordination and decision

Sep Okt Nov Dez

Automotive Retail:

Budget Process Chart 15

Budget Adoption

General management, commercial management and shareholders with executives: Official presentation of the agreed budget by the respective managers in final budget meeting Confirmation of managers through written commitments within their budget Financial accounting and HR: Anchoring of the objectives to be achieved in quarterly bonus payments

Sep Okt Nov Dez

Automotive Retail:

Budget Process Chart 16

Securing of the Budget

General management and commercial management with executives: Monthly business reviews as follow-up to monitor the achievement of objectives and implementation of measures as well as, if necessary, measures for adaptation

Sep Okt Nov Dez

Plan / actual analysis

Target achievement operationally

Target achievement revenue

Implementation of measures

If necessary. adaptation of

measures

Automotive Retail:

Budget Process Chart 17 Contact: michael@kuloge.de

Michael is a "PROfit" senior consultant at CCC Center for Coaching and Consulting GmbH, a daughter company of Screen GmbH, which has worked exclusively for the Volkswagen Group for almost three decades. In this role, he is responsible for a holistic development and management consulting of Volkswagen dealerships within the mid region of Germany which are participating the "PROfit" program. Prior to joining CCC, Michael acquired more than 20 years of CEO experiences in leading premium car dealership groups in Germany. This at privately as well as at Volkswagen AG owned VW, Audi and Skoda dealership groups and also for an US parent company owned BMW / MINI dealership group. Additionally he lectured at the Management Marketing Academy of the Volkswagen AG on leadership, marketing & public relations, human resources, reporting and generation change. He achieved several awards of the Volkswagen AG (organization, employee satisfaction study, public relations) and main premium awards of the AUDI AG (q-power, sales, after-sales, marketing). Furthermore he accomplished successfully a management audit at Volkswagen AG as well as CEO audits at Audi AG and Screen GmbH. He looks at companies as a generalist to the entire organization, including people, structures, processes and systems, culture and human behavior. Due to Michael's international activities he is very open-minded and likes intercultural exchange. He cooperated several years with the Ben Craig Center, a business incubator affiliated with the University of North Carolina in Charlotte, NC, USA and managed their subsidiary in Germany. Furthermore he founded a US investment corporation, was one of the initial investors and board members of a US medical start-up and founded their subsidiary in Germany. Additionally Michael consulted a high-tech company in Helsinki, Finland regarding growth, M & A as well as generation change and established business relationships to a MBO in St. Petersburg, Russia.