German magazine Focus reports that Apple works on navigation and media devices for cars and that Mercedes will be the first car maker to feature the Apple GPS in 2009.

The Apple Car devices would be exclusive to Mercedes for 6 month and then available in other car brands.
That Apple would build Car navigation and media centers for cars is a rumor for now, but sounds very likely. The iPod interfaces for cars are a big success and became nearly a standard feature. Most likely Apple is partnering with Google on the maps, which would get Google inside cars as well.
This could become another very lucrative sector for Apple after the mobile phone biz.
More details on the Focus Magazine site (German).