“It was pretty bad,” said the Team 18 driver, who would go on to win the race.
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“Cam and I are really good mates and you're battling on track but seeing that stuff, that's scary because getting out of the car actually isn't that easy.
“When it went up, it went up pretty quickly and then when he lifted, it just kept burning.
“I said on the radio, ‘Shit, he's on fire,' but you can't back off to help him or anything.
“It's just one of those moments, but then straight away they said he's okay, but it's scary.
“That's not good, it's not good to see. To see him get out, that's obviously good.”
Winterbottom is a former team-mate of Waters and himself has been in a Tickford car which caught fire, at Bathurst in 2009.
“I've had a car on fire at Bathurst; it's one of the most scariest things ever, because you're just looking for a marshal, and it's panic.
“It's a terrible feeling, obviously. It's not good. It's not what you want to see.”
Tickford Team Principal Tim Edwards said it was “100 percent” scary, but was grateful that Waters was able to find a fire marshal quickly.
“I think Cam did the right thing and I think this track is probably better then some of the other tracks we go to that there was actually a fire point that he could pretty much drive to.
“Sometimes, you don't know where and that's why JC drove all the way back [when his Mustang caught fire at Albert] because at Grand Prix track, the marshals are further back from the actual track itself.
“Fortunately, Cam stopped, found a marshal pretty quickly, and got the extinguisher in.”
It was a cruel end to Waters' race after he had qualified on pole position for the first time this year and led from the first corner.
“It's heartbreaking on a number of fronts,” said Edwards.
“The toll on the team and the financial toll as well.
“There's been so much talk about the competitiveness of the Ford teams and that, and that was a race that we had good car speed and what appeared to be good tyre life, so I think Cam was in the box seat.”
Even Will Davison, who was first Mustang driver home was he rounded out the podium, was “gutted” for his Ford stablemate.
“It's been a bit dry on the Ford side of things,” noted Davison, whose Dick Johnson Racing squad is the Ford homologation team.
“So, obviously, I was genuinely a bit gutted to see Cam's thing go out.
“You want to give back to Ford, they're putting a lot in, and it's been tough, so that wasn't good to see.”
Edwards confirmed that the cause of the fire was different to those of the Courtney and Nick Percat Mustangs at Albert Park, with Davison saying he has no concern about getting back into his car tomorrow.
Waters, meanwhile, is said to be “relaxed” after a calming beverage.
“He's had a couple of beers up in corporate so he's a little bit more relaxed now,” reported Edwards in the hour after the race.
Qualifying for Race 14 of the season starts at 09:30 local time/10:00 AEST.