Volkswagen acknowledged Monday that it helped finance a 2014 study in which caged monkeys were forced to inhale fumes from a diesel Beetle.
As part of the study, 25 people were exposed to varying levels of nitrogen dioxide for three hours to investigate the possible health effects of the chemical compound in concentrations below the limit for workplaces, Uniklinik RWTH Aachen said in a statement.
The scandal follows VW's admission in 2015 that it had manipulated 11 million diesel cars worldwide, equipping them with cheating software to make them seem less polluting than they were.
"The methods used by EUGT in the United States were wrong, they were unethical and repulsive", he said.
The report came more than two years after Volkswagen (VW) admitted to cheating US diesel emissions tests, sparking the biggest business crisis in its history, and pledged sweeping changes to ensure such misconduct never happened again. "I regret it very much".
The German government has called a special meeting with the affected auto companies to ask them to explain themselves.
"Thomas Steg is a general representative of the Volkswagen Group and will remain suspended from his duties until these matters have been fully investigated".
"The indignation felt by many people is completely understandable".
Europe's largest automaker has come under fresh scrutiny after the New York Times said last week that it and German peers BMW (BMWG.DE) and Daimler (DAIGn.DE) funded an organisation called European Research Group on Environment and Health in the Transport Sector (EUGT) to commission the tests.
VW chief executive Matthias Muller added: "We are now in the process of investigating the work of the EUGT, which was dissolved in 2017, and drawing all the necessary consequences". "Mr Steg has declared that he will assume full responsibility".
Tests were conducted by the Lovelace Respiratory Research Institute, which is based in New Mexico.
Although it was the EUGT that commissioned both tests, the organisation itself was financed by the trio of vehicle giants, hoping its research would defend diesel's green reputation.
Reuters could not confirm the details and objective of the study and EUGT, which was dissolved a year ago, could not be reached for comment.
Amid the controversy, Berlin's Tageszeitung daily said "while these experiments are doubtlessly scandalous, the bigger scandal is the experiment the auto industry has been conducting on the wider population for decades".
The world's biggest carmaker Volkswagen faced fresh scrutiny today over reports it helped finance experiments that saw monkeys and humans breathe auto exhaust fumes.