"We sadly confirm the death of Jose Lumbreras del Cabo, co-driver and participant in this rally," said a statement from the rally's organisers.
"The driver of the car, Carlos Iscar, is in a stable condition in the Universitari Son Espases hospital.
"The organisers, sponsors and participants profoundly lament having to inform about this terrible accident and send their profound condolences to the families in this tough time."
Spanish media reports said the car caught fire after it struck a tree.
Both men were in a 1984 Renault 5 Turbo when they crashed just five kilometres into the Coves-Campanet stretch at 12.20 local time.
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