Ookworld.com offers a history of the Highway Hi-Fi. They debuted in 1956 as an option in some Chrysler models. The big catch was that they only played records specially made for in-car phonographs: 7-inch 16⅔-rpm ultra-microgroove format records. There were only six discs in this format to choose from. Those discs contained a selection of "classical recording, the tops in popular music, drama, children's stories" selected by Columbia Records executives.
Chrysler didn't offer this style of in-car phonograph again. But in 1960 it did offer a unit that played regular 45-rpm records. You could stack up 12 of them at a time. It worked well if you were sitting in your car idling. As soon as the car started to move, there were problems.
The UAW-Daimler-Chrysler site also offers a shorter history of the in-car phonograph, with color pictures.