A teenager brutally attacked with a hammer remains in hospital following a road rage brawl in Dunedin.

Senior Sergeant Anthony Bond said at about 1.30pm yesterday, a Mazda vehicle with four occupants, including a baby, hit a Mercedes on Jetty St.

This collision was witnessed by the occupants of a Subaru vehicle, who then joined the Mercedes in chasing after the Mazda.

The vehicles travelled through Dunedin before reaching McRae St in Mornington, where the Mazda came to a stop.

The cars crashed into several parked vehicles, Bond said.

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The occupants of all three vehicles got out on McRae St, and an assault took place between the groups.

A 16-year-old occupant of the Mazda allegedly used a hammer to strike another 16-year-old occupant of the Subaru in the head.

The person who allegedly used the hammer was arrested and charged with wounding with intent to cause grievous bodily harm and appeared in the Dunedin Youth Court this morning, Bond said.

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Another 16-year-old from the Mazda who was allegedly involved in the altercation was arrested and charged with assault.

He has been bailed to appear in the youth court next Tuesday.

Bond said the 16-year-old victim from the Subaru, a passenger in the vehicle, was driven away by a 20-year-old male, who was subsequently stopped by police on Princess St.

Police identified that the head injury needed medical attention, and the 16-year-old was taken to the hospital, with the 20-year-old following in the Subaru.

Upon arrival at the hospital, the 20-year-old was told that the Subaru would be seized.

Bond said the Subaru driver then allegedly attempted to remove a bag containing 70 grams of cannabis, which was quickly discovered by police.

The 20-year-old was then arrested for possession and supply of cannabis.

The 16-year-old victim who was struck with the hammer underwent emergency surgery last night and remains in hospital.

Further charges may be laid as inquiries continue into the eight people and three cars involved, Bond said.

Police are urging anyone who witnessed the incident or has relevant dashcam footage to come forward.

Information can be provided online or by calling 105, quoting reference number 250129/2948.