Using indentation and fonts to separate hierarchy levels has its problems: Why should an italic text signify top level, and boldface signal subordination? If the intermediate levels are not selectable, you may also use space to separate levels:
The first level is shown as
Clicking "Car", the next level is displayed:
Clicking "Car" again returns you to the top level list, clicking "Ford" takes you to the list of Fords.
The lists can either be shown side by side (if space permits) or sequentially (i.e., the list of cars replaces the list of transportation modes).
Apart from the question of whether intermediate levels must be selectable (i.e., whether "Ford" is a valid selection), another difference is that browsing the entire list is easier if you only have to scroll. Depending on the knowledge of the user of the categories, the scrolling might be more appropriate.