In one of his last findings before his retirement this month, Christchurch Coroner Richard McElrea said the force travelled into and through the driver's seat. Mr Watson was fatally injured and died at the scene.
His nephew and co-driver at the time received moderate injuries and was taken to Christchurch Hospital.
Mr Watson was described as "an experienced rally driver of some 20 years" in the inquest findings.
A mechanic by trade, he had put a lot of work into his car and his nephew said he had been Mr Watson's co-driver on at least five other rallies and had "never felt unsafe in any vehicle with him".
On the day of the crash, another competitor crashed and flipped his vehicle on the same corner as Mr Watson and another two competitors clipped the same tree.
A 79-year-old volunteer placing a warning triangle on the road after the first car flipped was thrown down a bank by the impact of Mr Watson's crash, the findings stated.
The event's chief safety officer Michael Winter said at no stage did he have any concerns about the corner after the finish line, saying: "It's no different to any other corner in the forest."
Trees were felled in 2011 near the corner where the crash occurred.
A Motorsport New Zealand report into the incident stated a major contributing factor was the removal of the trees, which created the impression the road was straighter than it was.
Senior Constable Stephen Spencer of the Canterbury serious crash unit told the inquest the trees created a hazard being so close to the finish line.
Mr McElrea said it was clear from the number of mishaps on the corner that the finish line was too close to the trees.
He recommended Motorsport NZ continued to promote RallySafe GPS technology, which if installed would have signalled hazards, such as crashed cars, to other drivers.
Mr McElrea also recommended Motorsport NZ further considered the circumstances of the crash, with particular reference to the course design and assessment of hazards, the role of the chief safety officer, reporting of incidents in the race, the safety plan in regards to the marshall's responsibilities when a crash occurs and driver experience.
He also recommended the organisation reconsidered how drivers and co-drivers were briefed, after hearing it constituted of a handout and a brief oral instruction held in a car park which was described as "very short".