Earlier thick grey and white smoke was spewing from the fire and at least 25 people were waiting outside the Kaka St cordon, unable to get to work. Some people had given up and left.
Reece NZ's Auckland distribution centre operations manager Howard Diprose said even from 5km away he could see dark grey smoke "billowing out".
"It burns your lungs. You can't breathe it in. It doesn't sting, but it feels quite gritty on the back of your throat. It is obviously not good for your health.
"It smells like somebody is burning plastic rubbish. It is very strong."
His firm has had to close all of the doors and windows to keep the smoke out.
"We can see the smoke billowing out, even from out here.
"The wind has just turned more southerly so the smoke is blowing more towards Mangere East now. I feel sorry for those a lot closer to it."
Fire and Emergency New Zealand area commander Geoff Purcell said the "deep-seated" fire could burn all day.
"It's a huge fire and there's a lot of really thick, black smoke coming from it.
"We are doing everything we can to get this fire under control, and our crews are working extremely hard.
Assistant area commander Auckland City Barry Fox said the fire was covering an area 100m by 70m, and 12m high in some places.
"Before the cars were shredded they were drained of fuels and oils, but there are still some minor explosions going off, in tanks, bits and pieces within scrap heap."
The fire was reported at 1.56am.
As yet the cause of the fire was unknown.
Trudy Burt could see large amounts of black smoke from the Otahuhu rail bridge.
"I hope everyone got out okay – how terrible.
"I can see the red of the flames as high as the surrounding warehouses."
Witness John Caldwell said the smoke was "toxic".
"It is affecting breathing. The fire department won't advise if it is or not."
Another witness said the pile of scrap metal was about 12m high. "It is a huge fire - too hot to stand around.
"I could feel the heat from about 100m away."
Nobody has been injured in the blaze.
James Fletcher Drive is closed between Savill Drive and Kaka St.
Purcell said the fire would cause significant disruption to traffic.
"People should avoid the area if they can and close their windows from the smoke.
"Some businesses may also be affected by the cordon.
"We understand that this will cause disruption in South Auckland, and we want to assure people that our firefighters are giving 100 per cent to getting it under control."
