Fog computing extends the facility of cloud computing from the center to edge networks. Although fog computing has the advantages of location awareness and low latency, the rising requirements of ubiquitous connectivity and ultra-low latency challenge real-time traffic management for smart cities. As an integration of fog computing and vehicular networks, vehicular fog computing (VFC) is promising to achieve real-time and location-aware network responses. Since the concept and use case of VFC are in the initial phase, this article first constructs a three-layer VFC model to enable distributed traffic management in order to minimize the response time of citywide events collected and reported by vehicles. Furthermore, the VFC-enabled offloading scheme is formulated as an optimization problem by leveraging moving and parked vehicles as fog nodes. A real-world taxi-trajectory-based performance analysis validates our model. Finally, some research challenges and open issues toward VFC-enabled traffic management are summarized and highlighted.