I caught an article today in today's USA Today on how consumer electronics companies are now offering CD-player-free car stereos. These are not OEM-installed systems, and automakers would be wise to continue having in-dash CD players as standard features on new vehicles. Their customers have invested heavily in CDs over the past 25 years, despite the sharp downturn in CD sales this decade. Even rampant downloaders do a lot of burning music to CD.
Car makers should definitely look to add on options which allow MP3 player owners to use their players in conjunction with car stereos.
As it is, there are still plenty of cars with cassette/CD players, and there are plenty of peripherals one can buy to stick an MP3 adapter into the cassette deck.
The transition to an all-digital music economy is moving rapidly, but those who stick with physical product aren't necessarily Luddites to be shunned, just as people who want to shop at brick-and-mortar stores for certain items they can buy on the web aren't technologically backward. They just have preferences which are ingrained, preferences which shouldn't be ignored by marketers.