New interim Audi CEO Bram Schot. File photo: Matthias Schrader / AP

MUNICH - The supervisory board of Audi has suspended Chief Executive Rupert Stadler and appointed Dutchman Bram Schot as an interim replacement, a source familiar with the matter said on Tuesday. Audi was not immediately available for comment. 

The decision comes as Volkswagen bosses were locked in a second day of hastily convened meetings to address a leadership crisis sparked by the arrest of the head of the carmaker's Audi brand, sources familiar with the matter said.

Germany's largest carmaker is scrambling to determine how to manage its most profitable brand after German authorities detained Stadler as part of their investigation into the group's emissions test cheating scandal.

Schot joined the Volkswagen group in 2011 after having worked as president and CEO of Mercedes-Benz Italia. He has been Audi board member for sales and marketing since last September.

The arrest of the 55-year-old Stadler on Monday threw VW back into turmoil, as it raised fresh questions about whether the company had done enough to reform itself almost three years after it admitted to rigging U.S. emissions tests on diesel engines. 

Stadler has been under fire from the media, politicians and VW's powerful trade unions for his handling of the emissions scandal, but he survived a major management reshuffle announced in August thanks to backing from the Piech and Porsche families that control VW.    

Last week, Munich prosecutors said they were investigating Stadler, the head of VW's most profitable business, for suspected fraud and false advertising and for his alleged role in helping to bring cars equipped with illegal software on to the European market.

They said the decision to arrest him at his home in Ingolstadt in the early hours of Monday was made because they saw a risk that he could try to suppress evidence. He remains remanded in custody but has not been charged with a crime.

Last week Volkswagen was hit with a €1 billion (R15.5 billion) fine imposed by German prosecutors for diesel emissions cheating The German car giant said it had "accepted the fine" and would not lodge an appeal.

The giant carmaker admitted in 2015 to fitting 11 million vehicles worldwide with "defeat devices" - software designed to trick regulators into thinking cars met emissions standards.