Molly Taylor and co-driver Malcolm Read have walked away from a massive crash.

The leading Australian Rally Championship contenders crashed their factory-backed Subaru on the first pass through the Coldwater stage this morning, the car hitting a hay bale guarding a tree and then catching fire.

After being treated by medical crews on the scene Taylor and Read were cleared of any major injuries, however the car has been withdrawn from the event.

"Following an incident this morning on the second stage of Kennards Hire Rally Australia, the Subaru do Motorsport team will not contest the rest of the three-day event," read a statement from the team.

"The Subaru crew of driver Molly Taylor and co-driver Malcolm Read were checked out by medical staff on stage after reporting soreness following a high speed collision with a hay bale, which was positioned to guard a tree trunk.

"They were subsequently transported by a rally Medical Intervention Vehicle to the rally village medical centre for further checks.

"Both report soreness but no other injuries.

"The team’s WRX STI was badly damaged in the engine bay area, prompting the stage to be stopped for a period to enable emergency crews to access the incident, which occurred 7.2 kilometres into the stage."

Describing the crash, Taylor said: “We just came really hot over a crest into a fast right hander and when the car landed over the jump it just snapped right and unfortunately there wasn’t any room, and we just went straight into the bale on the inside pretty fast.”