Snopes says this is TRUE.
http://www.snopes.com/photos/accident/smallcar.asp
So I know it must be a fake.
I can tell you from personal experience: I had a 1974 Dodge Maxivan, and was at a red light. A Volkswagen smashed into me from behind. I wasn’t sure, but thought a person had bumped the van, so I got out. The VW was literally crumpled up to the passenger area. My back bumper had a very, very slight dent. :)
I drove a Smart car for 2.5 years. It was a love-hate affair. I came to fear everyday on the autobahn. Any wind...would push the car at 60mph to one side or another. There were no spare tires in the trunk, so you had to call for service. The tank barely held 5 gallons of gas...so you refilled every five days. The AC unit never cooled the interior. The front window was always foggy unless you left the passenger window down an inch or two. Changing the headlights meant an hour of work because only a 5-year old kid’s hand could reach in and swap the bulbs. The glass roof was a heat magnet in the summer. And the thing just never had any pick-up and go. Oh yeah, and it got 55 miles per gallon...which is the only super positive about it.