Yes - I have created linking custom post types before. That's a post type that's a child of 2 other post types. In the case of my cars and radios problem, a third post type that's a child of both card and radios allows for many-to-many relationships and does create the type of linking necessary.
The problem with this is complexity. It would take either enough custom code to remove orphaned child posts, or, as probably happens most often, just letting those orphans build up in the database.
There has to be a simpler, more straight forward way of relating posts of one type to posts of another type, and it sure seems like taxonomy is a convenient means of doing that. The only thing currently missing is an automated way to syncing the elements of a taxonomy with posts of a specific type.
I would imaging an additional pane on the page where a CPT is defined, where the user could choose whether an automatic taxonomy for that post type should also be created and maintained.
Two other issues would be key to this: First, the pane where taxonomy is selected for a post type would then need to prevent users from adding new taxonomy terms, since this would now be controlled by adding new posts to the type controlling the taxonomy. The second issue is that each time a post with an automatic taxonomy is deleted, the meta records for associating any posts to that posts automatic taxonomy term would also be automatically removed.
In practice it would work quite well. If I remove a radio post, the term disappears, along with all of the links from car posts to that term, so it would simply not appear as an option on any car post.
What I'm trying to achieve is a simple mechanism for relating posts to other posts where those relationships are automatically removed when a related post is removed. I'm thinking that a taxonomy makes sense because the nature of this function needs to be many to many, or at least one to many when used while editing a post.
Let's say I have a list of products as one post type. Then, lets imagine I have a list of projects in which one or more of those products are used. The only way I can link those products to the projects in which they're used is to either create a third post type to link between the two post types, or to create a taxonomy matching the elements of one post type that is used to relate records of the other post type.
The fundamental problem with both of those methods is that they both require manual maintenance - unless sufficient additional code is written to make it automated. And the problem with that additional code is that the entire approach is already too complicated for what's needed. What's needed is a simple, built-in mechanism to relate posts to other posts which automatically removes those relationship records when their corresponding posts are removed.
I think this is sitting right in front of us, but we've all been too close to our own code to see it!