One lane of State Highway 5 has re-opened while emergency services deal with a car that caught fire south of Rotorua.

A police spokeswoman said police were at the scene, near the intersection with Waikite Valley Rd in Waiotapu.

"The fire is now out and NZTA contractors are directing traffic. There are still delays."

Earlier the road was closed due to safety concerns.

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All occupants were out of the car and there were no injuries.

A police spokesman said grass near the car had also caught fire.

Melanie Hatchard from the Waiotapu Tavern said she heard a loud bang and could see lots of smoke.

"It's just up the hill from the tavern about 500m away. The traffic is backed up past the Benny Bee and moving slowly," she said.

Tanya Marie who was driving past at the time said something "blew and shot across the road".

She said it was a single car and didn't appear to be a crash.

Rotorua fire station officer Dean Irwin said the car was well alight when they arrived with one fire truck from Rotorua and the water tanker from Lake Okareka rural fire force.

Irwin said the cause of the fire was yet to be determined but it was a timely reminder for people to give their car a full service before going away on long drives at this time of year.

Investigations into the fire continue.