He said he could see a white SUV in the middle of the road but did not see anyone inside.
Other motorists were waving down traffic, warning them to slow as they approached.
Shaw could see people gathered near the bank and assumed they were with someone seriously injured.
He said the speed limit on the stretch of road was 100km/h which was "too fast" for the area.
Cars pulling out from side roads "really had to go for it" to get out when oncoming traffic was coming around the bend at speed.
Shaw said not long ago his neighbour's wife was struck and killed on the same stretch by a car as she walked home from the beach.
Judy Corboy said she was in a vehicle following one of those involved when the crash happened and she did not believe speed was an issue in this instance.
"We came round the corner approaching the intersection at 85kph in our elderly ute," she said.
"The car in front was not going much faster."
The crash happened at an intersection.
She was one of several motorists who stopped to help after the collision. She waved down traffic while her husband called 111. Other members of the public helped with first aid.
"All credit to the NZ public for doing the right thing - whether assisting at the scene or driving through slowly and respectfully," Corboy said.
The Serious Crash Unit is attending and the road is expected to be closed for a number of hours.
Diversions are in place at SH2 and Woodlands Rd to the east, and SH2 and Waiotahi Valley Road to the west.
Heavy vehicles, however, will be unable to take the diversion and will need to wait for the road to reopen.
