Volkswagen seems to have the edge to win the 43-year-old former DaimlerChrysler executive's services.
Bernhard's salary is the only issue left to negotiate, company sources say.
If Bernhard's high salary demands are accepted by the VW supervisory board, his new management position, which already has caused a stir among VW management board members, could be announced at the Paris auto show at the end of next month.
If the sides reach an agreement, Bernhard would join the VW board in January as head of the VW brand.
GM Vice Chairman Bob Lutz initially had envisioned Bernhard as the successor to former development head Mark Hogan, who left GM to become president of Magna International last week.
Detroit sources say, Bernhard no longer plays a role in GM's future plans.
Bernhard's promotion to head the Mercedes Car Group was derailed by the DaimlerChrysler board at the last moment in April. He left the company after he was denied the Mercedes job.