"As for costs, this means in concrete terms a further productivity gain of 10 percent through the comprehensive introduction of the VW production system, boosting efficiency in indirect areas and net savings of 1 billion euros on material costs," the Wolfsburger Allgemeine Zeitung quoted the memo as saying.
The VW production system is based in part on a deal with labor reached this summer that sought to set unified standards at its core western German plants for such things as the time needed to complete specific jobs.
Indirect areas refer to operations that are not directly linked to automotive production.
There was no immediate comment from Volkswagen.
Productivity gains of around 5 percent are more typical for the auto industry.
Bernhard was quoted as saying the sales and marketing side also had to keep costs at 2006 levels.
In mid-February, the VW brand chief told an in-house staff magazine that he aimed to boost productivity at its western German VW plants by up to 30 percent in the coming three years.