This might depend on which city you refer to. For example, I wouldn't say that Stockholm has any discernable smell to it.
But hey, people want cars. Lots of dirty but cheap cars. Almost nobody seems to care. It's just the nature of living in a poor country I guess.
I think cars generally contribute to bad smells, and poor waste management infrastructure can also contribute to bad smells (think garbage bins out on streets instead of enclosed, for example)
Stockholm has tolls to reduce road congestion though. The place was definitely smellier back in the 90's.