Shipments of hard drives for in-car digital systems are expected to reach 16.6 million units by 2013, nearly five times the 3.5 million in 2006, iSuppli said in a report released today. The firm argues that in-car navigation systems typically use either discs or hard drives for the storage of maps and other data. CDs are losing ground to DVDs, but both could eventually lose out to hard drives.

The trend would be a boon for hard drive manufacturers such as Seagate Technology (STX) and Western Digital (WDC). There would also be the potential for flash memory players such as SanDisk (SNDK) and Micron Technology (MU) to break further into the in-car device market.

“In the very near future, vehicles will be required to receive and store broadcast digital content, from radio, television and other data-delivery systems such as WiMAX,” said iSuppli analyst Richard Robinson. “This requirement is shaping the strategies that are being developed by vehicle manufacturers as they look for suitable replacements for current read-only optical technologies.”

iSuppli predicts that despite consumer preferences shifting away from read-only optical technologies in favor of flash memory and hard-drive-based media, single-CD systems will remain the default audio playback technology in cars through 2013, with nearly 100 percent market penetration in the United States, Europe and Japan. The technology shift would have a  effect on the in-car experience for large players such as Toyota (TM), Honda (HMC), General Motors (GM) and Daimlerchrysler AG (DCX).

Forecast chart, below: