Okay, you're doing several things wrong.
Your function is called volvoCar and you are attempting to use a function called VolvoCar - JavaScript is case sensitive.
This isn't the best way to assign an event-listener. You're adding it in the HTML, which is considered 'messy' (see Unobtrusive JavaScript). Also, you want to attach the function, not the result of the function (which you are doing by calling it). Functions are first-class objects in JavaScript.
onclick is the wrong event handler to use in this case. You want to use the onchange handler of the <select> element.
So:
HTML:
<img id="image" src="Null_Image.png"/>
<select id="CarList">
<option value="Null">No Car</option>
<option value="Volvo">Volvo</option>
<option value="Audi">Audi</option>
</select>
JS:
var changeCarImage = function () {
document.getElementById('image').src = this.options[this.selectedIndex].value + "_Image.png"
}
var carList = document.getElementById('CarList');
carList.addEventListener('change', changeCarImage, false); // Note this has some issues in old browsers (IE).
This can be seen working here!