On Friday, Volkswagen (VW) said it was setting aside another €2.5bn to deal with the fall-out from the "dieselgate" scandal in the United States, as its efforts to recall tainted cars there proved to be more "complex" than expected.
The company has recalled around 11 million vehicles worldwide since admitting to cheating emissions tests.
Volkswagen says it expects to take charges of about Dollars 2.9 billion in the third quarter to cover the costs of buying back and retrofitting diesel cars in North America.
VW attributed the latest charge to "an increase in provisions relating to the buyback/retrofit program for 2.0l TDI vehicles".
German weekly Der Spiegel reported today that VW could face further scrutiny because it failed to properly inform U.S. regulators about changes to emissions control software in almost one-half million cars with gas engines.
The arrest on Wednesday came after investigators searched two premises, a spokeswoman for the prosecution's office in the southern city of Munich told AFP.
The Sueddeutsche Zeitung and broadcasters NDR and WDR named the arrested suspect as Wolfgang Hatz, who stepped down from his post on Porsche's management board a year ago after being suspended over the "dieselgate" investigation.
The former head engineer at Volkswagen Group, Wolfgang Hatz, has reportedly been arrested by German authorities for his role in the massive dieselgate scandal that saw millions of vehicles roll out from VW Group brands with illegal software.
VW said it would publish its third-quarter results on October 27.
Both the US Environmental Protection Agency and VW's top executive in the US confirmed the inquiry today.
Traders and analysts were disheartened by the fact the company was still paying charges over two years after the scandal broke. Facing threats of a ban on diesel cars by German cities under pressure to reduce pollution, Volkswagen and other auto makers are offering up to EUR10,000 in discounts on a new auto for customers who trade in old diesel vehicles.