Anonymous "people with knowledge of the matter" tell Bloomberg this is the case and say there are about 200 employees reportedly working on the project. Apple reportedly wants to enter the car market because the company is looking for new business sectors. The development began in earnest in the past few months with all of the new hires.
The automotive project is rumored to be called Project Titan within the tech business, and its styling may resemble a minivan, at least at this stage. While Apple has no car manufacturing facilities of its own, meetings with Magna Steyr indicate the company could consider a contract partner to actually assemble the vehicle.
Of course everything about this project is entirely a rumor at this point, and Apple isn't confirming anything. All signs so far suggest the business is developing an electric car, and the poached workers from A123 Systems indicate the company is researching battery technology. Although, if Apple really wants to debut the vehicle in five years, there are still a multitude of problems to solve, including setting up a sales and service infrastructure.