Smaller, lighter cars are fine in a crash with other smaller, lighter cars. But in the US the average vehicle is so heavy that the minority of people in the small cars would get squished like a pancake.
That is just nonsense. A small car can be much safer than a larger car, depending on the construction. Modern small cars use all kinds of smart tricks like:
- Putting a bar in front of the engine so a non-100% frontal crash (like most are) will still use the entire front crumple zone.
- Transferring the energy around the cabin, so the parts of the car that are behind you will crumple, while you are safe.
- Moving the engine out of the way. The engine is a very heavy and inflexible part of the car that will get pushed into your lap during a crash. By leading it downward, it will go under you, and can move farther (and can thus be used more effectively for slow/survivable braking).
This is an example of a 'duel' between an big old car and a modern small car which shows the difference in practice:
Of course, a modern SUV or truck might be better designed than that old Volvo, although many SUVs and trucks seem to be fairly poorly designed for safety. For example, the most common cause of death when driving a SUV is rollovers (where your head is squished into the pavement), which is much less common in small cars. On the whole, big cars do tend to be a bit safer than small cars, but I doubt that you are much safer in a modern sedan or station wagon when compared to a SUV (when looking at death statistics that encompass all accident types). I wouldn't drive a Smart Fortwo in the US though (but I'm not comfortable driving that car in Europe either).
Plus US drivers seem to spend proportionately more time going at higher (highway) speeds (commutes in most other countries generally involve less highway). Particularly when they are generally used for city driving at speeds = 60 km/h anyway, you simply aren't likely to have any massively high energy impacts.
Europe isn't one big city, you know. There is plenty of highway with mostly 80-120 km/h speed limits and a lot of people use these for their commute. In my country, the roads are very heavily used and it is very hard to expand them because there is little room around them. As a result, the number of lanes available often changes for even the largest highways. So you get a lot of bottlenecks where speeds suddenly drop from 120 km/h to 0 km/h. It's no surprise that a lot of accidents happen at the end of the congestion.
Those roads always have central dividers, so head on collisions are not possible (unless someone goes against the traffic). However, plenty of 80 km/h roads do not have them. These roads usually have a lot of corners, so a badly timed overtake can cause a 160 km/h combined collision (although it probably doesn't matter what car you drive then). A lot of these roads are lined with trees and it's really no fun to drive 80 km/h into a tree.
Because of the heavy traffic and fairly dangerous road situation, there is a fairly big focus on safety. However, most Europeans understand that a small car can be quite safe. They also have to consider parking space, which is more limited in Europe; and fuel costs, which are much higher.