It’s been a long slow journey for YouTube Music on the road to replacing Google Play Music. Since being announced as the eventual long term strategy for Google’s streaming music plans, we’ve seen the app pick up a few new tricks.

The latest update brings a much-requested feature: local media navigation to make playback within the app easier.

Once you get the update (we still haven’t got it via the Play Store) you’ll find the files under library/ artists in the Device Files tab:

At present, while the app can now navigate to local files and play them back, these files cannot be incorporated into playback queues or playlists at this stage.

With this update, YouTube Music takes one step closer to becoming a complete replacement for Google Play Music.

However, until it gains the ability to play back music uploaded to users “Google Play accounts”, many users – myself included – will not even consider it an option, let alone a replacement.

Source: 9to5Google.
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I have already switched over to Rocket Player for my music now. I am expecting a big push now for pay per month streaming as YT music develops. I find Rocket Player better on my android auto anyway in regards to being able to search artists etc manually for when AA struggles with voice control.