Rupert Stadler, the chief executive of German car manufacturer Audi, was arrested as part of investigations into an emissions scandal.
A spokesman for Volkswagen, which owns Audi, confirmed his arrest.
Munich prosecutors said they acted to avoid the risk of Stadler tampering with evidence.
The scandal erupted three years ago, when it was discovered that the cars were equipped with devices that falsified emissions tests.
The devices were initially found in Volkswagen cars, but its Audi branch was also involved in the scandal.
Last month, it admitted that as many as 60,000 new A6 and A7 models with diesel engines had problems with the emissions software.
Last year, Audi recalled 850,000 cars from the market. /REL/
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