Gizmodo reports:

A Volkswagen spokesperson told German magazine Capital that an iCar may be on the way. Steve Jobs and VW Chairman Martin Winterkorn got together in California a few days ago to “plan an intensive co-operation with the building of vehicles.” It might even be called an iCar

This would be the perfect April Fool’s joke. But we’re in August.
In other words: Wow.

Let’s see how this develops (it is still unconfirmed, after all). I’m curious to see how deep a car could get Apple-ized (i.e. not simply some iPhone like device on the dashboard..) I can only begin to imagine what Apple could do to a whole car.

It is probably only some sort of technology integration agreement (like what Apple did for the iPod with auto makers).