A witness has described hearing loud explosions at a Queenstown car dealership which was engulfed in flames this morning leaving one staff member with burn injuries.

A police spokeswoman confirmed emergency services were alerted to a workshop fire at Macaulay Motors, which is in a shopping area at Five Mile, Frankton, at 9.43am.

One person was injured in the blaze, which had now been contained, she said.

A fire has broken out at a car dealership in Queenstown. Photo / Supplied
A fire has broken out at a car dealership in Queenstown. Photo / Supplied

James Castle, who works nearby, told the Otago Daily Times he saw thick black smoke coming from the building's roof and later heard "loud bangs of something exploding inside".

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The building went up in flames "pretty quick" and accelerated to the point where large clouds of black smoke was billowing from the roof within about two minutes.

He estimated it took about 10 minutes for firefighters to arrive.

A St John spokesman said one person was being taken to Lakes District Hospital with moderate burn injuries.

It had been brought under control by about 10.20am, and crews were now in salvage mode and dampening down the area, she said.

Senior Station Officer Michael Ide said a "huge" amount of resources, including 30 firefighters, were sent to battle the fire, which sent thick black smoke billowing from the building's roof and was made more dangerous due to the presence of diesel, petrol, acetylene at the dealership.

There were six vehicles, including some on hoists, in the building, which is less than a year old.

It was clear staff had been working on some of the vehicles this morning, but whether that was connected to the cause of the blaze was not yet known.

Ide said the person injured was a staff member at the dealership.

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Firefighters at Macaulay Motors in Queenstown. Photo / Supplied
Firefighters at Macaulay Motors in Queenstown. Photo / Supplied

A reporter at the scene said at least two dozen firefighters, some wearing oxygen tanks and breathing apparatus, were at the scene, along with police and a St john ambulance.

There were no longer any flames visible by 10.15am and most of the firefighters were no longer battling the blaze.

Earlier, massive flames were seen coming from the building's roof and thick black smoke is visible over much of Frankton.

A Fire and Emergency NZ spokesman confirmed crews were at the scene of a building fire in Frankton, but said no further details were available at this stage.

An Airways spokeswoman said the building was on non-airport land to the north of the runway, but flights to and from Queenstown Airport were not affected by the fire.