Tauranga's Phil Campbell is in the lead of the Group N two-wheel drive championship after an encouraging run in Rally Otago.

Phil has climbed the ladder in the standings of the Brian Green Property Group New Zealand Rally Championship despite an accident at the start of the second day forcing him into retirement.

Tauranga's Phil Campbell competes in the Rally Otago. Photo: Euan Cameron.

Phil started the event confident after his maiden class win in the NZRC at the previous round, Rally Wairarapa, and set times that had him amongst the top two-wheel drive competitors on the three stages held in the dark on Friday night.

On Saturday Phil was competitive on the high speed stages, on three occasions piloting the Letts Buildings Ford Fiesta to an average speed of more than 100km/h whilst holding down a comfortable second in class across the day and staying within striking distance of the class lead.

At the end of the opening leg, the bonus points meant Phil and co-driver Venita Fabbro took the outright class lead for the championship.

Day Two started well with Phil taking the class lead and posting a time that was a remarkable seventh fastest amongst the more powerful four-wheel drive cars, however on the very next stage Phil under-steered into a bank, causing the car to roll over and slide on its roof for more than 50 metres.

With the help of some spectators, he was able to continue, however a damaged hub caused a wheel to fall off later in the stage and end his rally.

'It was a really good weekend for us apart from Sunday,” said a philosophical Phil.

'Having watched the in-car footage, it seemed like something wasn't right but I guess we will never know.”

The Campbell Rally Sport team now face a race against time to repair the car for Brother Rally New Zealand, Round Four of the NZRC, which will see the team compete against the best in the world, in just over two weeks' time.