Manawatu Fire Service Assistant Area Commander Rodger Calder said the fire began in the Toyota Previa people-mover just after midday.
"On arrival there we found a passer-by had rescued two children out of the vehicle.''
Palmerston North Fire Service station officer Bevan Clark said the children's mother had popped into Unichem Pharmacy to pick up a prescription when the car, parked at the Pak'nSave Ferguson St carpark, burst into flames.
A bystander called the Fire Service while staff from the Pak'nSave supermarket fought the fire with extinguishers.
Mr Clark commended a passing woman who helped saved the children from the burning vehicle.
The cause of the blaze was still under investigation, he said.
- additional reporting Manawatu Guardian