City of London Police detectives believe 680 people made purchases from a UK-based eBay account found to be selling counterfeit airbags and covers.
A 34-year-old man was arrested in Blandford Forum, Dorset, and is being questioned by officers.
Police have warned the airbags could pose a danger to drivers and passengers.
City of London Police, which is co-ordinating the investigation, has also found more than 100 suspected counterfeit airbags of various makes at an address in Poole.
Bomb squad officers were called to the premises to ensure there was no risk of the airbags exploding.
The airbags have been been taken to a Ministry of Defence facility for safe storage.
The inquiry, Operation Landguard, was launched in January after Honda UK conducted test purchases on airbags sold through eBay.
Two airbag units and an airbag cover for the Honda Accord and Honda CRV bearing the Honda badge were found to be fake.
Detectives discovered that fake airbags had been supplied by the eBay seller to at least 148 individuals or businesses since September 2013.
Officers are also looking into another 532 purchases to see if they concern other counterfeit manufacturer car parts.
The airbags were being sold for Â£170, about half the cost of genuine Honda airbags.
Police say the fake airbags are made differently from the real ones and there is a "significant risk" they will not inflate in an accident, or that the metal Honda emblem will fly off.
They have advised car owners with concerns about their airbags to contact car manufacturers.
A man has been arrested by police as part of a major operation into the sale of fake car airbags.