German prosecutors are investigating whether Faurecia bribed purchasing staff to win contracts from carmakers including Volkswagen and its premium division Audi and BMW.
Sources at Faurecia and its majority owner, PSA Peugeot Citroen , said on Thursday that Faurecia Chief Executive Pierre Levi had also been put under investigation.
Faurecia and Peugeot declined to comment on the matter. Levi told reporters in Paris on Monday at the company's earnings presentation: "We are cooperating and we hope that there will be clarity but until the end of the probe I cannot comment."
The sources at Faurecia and Peugeot said Levi was likely to decide on his future soon.
"Mr. Levi as chairman and chief executive of Faurecia is responsible for everything so he has been put under investigation, but there is no suggestion that he personally bribed anybody," one of the sources said.
German media reports said on Wednesday that Volkswagen Chief Executive Bernd Pischetsrieder wrote to his counterpart at Peugeot, Jean Martin Folz, saying that his company, Europe's largest carmaker, no longer wanted to work with Levi.
A Volkswagen spokesman confirmed that Pischetsrieder had written to PSA about the bribery case but gave no further details.
A sector analyst at a big French bank, who declined to be named, said: "There are two scenarios: Either PSA asks Levi to go straight away or they support him until the end of the probe. But Volkswagen is Faurecia's second-biggest client and the pressure is enormous on him."
Faurecia, the world's largest maker of car instrument panels and doors, makes about 22 percent of its total sales to Volkswagen, about 8 percent to DaimlerChrysler and 6 percent to BMW.
Levi has been Faurecia's chairman and chief executive officer since May 2000.
Born in 1955, he began his career at McKinsey & Company and worked at DMC, Carnaud Metalbox and Rhone-Poulenc before he went to Faurecia in September 1999.
Frankfurt prosecutors said on Monday their year-long probe centred on whether a French auto parts manufacturer paid bribes which they suspected were worth a total of 600,000 to 800,000 euros ($786,000 to $1 million) a year.
Three suspects have been placed in investigative custody, one of whom was released after confessing, they added.
A senior Munich prosecutor has said five other suppliers were also under investigation but he did not name them.
Faurecia is ninth on the Automotive News ranking of top global suppliers with $14 billion in original equipment sales in 2005.