Hereford and Worcester Fire and Rescue Service said the fire happened at a site in Broad Street, Kidderminster, where vehicles are stored and repaired.
Nearby residents reported a "lot of smoke" coming from the 130m by 60m unit at about 13:40 GMT.
Brigade spokesman Dan Quinn said four crews would stay overnight to tackle any hot spots and make the area safe.
He said the blaze "destroyed 100% of the unit".
More than 30 firefighters from across the West Midlands region tackled the fire at its height.
No-one was injured, the fire service said.
The cause of the blaze is being investigated.
Lee Burton, a witness at the site, said he heard "explosions" before seeing plumes of smoke.
Rebecca Telling, who lives nearby, said she was watching television which she noticed "hazy smoke" through the window.
"I saw it all black in the sky and I could see a lot of flames from the roof tops, still really black and burning quite a lot. It [the smoke] is moving across through roof tops," she said.
Firefighters remain at an industrial unit in Worcestershire which has been "completely destroyed" in a blaze.