German magazine "Focus" is reporting that Apple will shortly begin production of navigation and sound systems for cars.

The brief article suggests that the products will be on the market in 2009, via an initial exclusive 6-month deal with Mercedes, who were one of the first companies to offer iPod integration in their cars.

The Google translation of the German text is a bit patchy, but suggests that the units will combine "maintenance, communication and navigation".

The communication part suggests that this might be an iPhone expansion, perhaps a full GPS-enabled version that can dock in your car, rather than a stand-alone Apple branded navigation system, but who's to say?

We'll keep you informed if the Apple rumour mill churns out any further clarification.