Volkswagen was holding crisis talks on Monday to find a stand-in boss for its Audi brand, a source familiar with the discussions said, after German authorities arrested Audi CEO Rupert Stadler as part of a probe into emissions test cheating.

Stadler's arrest throws Volkswagen (VW) into turmoil as it struggles to reform itself in the wake of the cheating revelations, which emerged after regulators blew the whistle in September 2015 on the carmaker's use of illegal software.

The arrest looks set to raise tensions on VW's supervisory board, putting at risk a fragile truce between management, VW's controlling Piech and Porsche families, as well as representatives from labor and the region of Lower Saxony.