Witnesses said a maroon car had just pulled up to queue at the lights at the intersection with Hillside Rd about 5pm when a white car appeared to drive straight into the back of the maroon car, shunting it into another car in front.
Several people jumped out of the first car and attacked the white car with bottles, a golf club, steel bar and wooden stake.
A fight between the occupants of both cars ensued, but ended when a silver car drove up and picked up the occupants of the white car.
The occupants of the maroon car then drove off.
Senior Sergeant Steve Aitken, of Dunedin, said initial reports indicated gang members were involved in the incident.