Two undercover police cars began trailing the car on New Street in Brighton around lunchtime after reports of the vehicle being involved in suspicious behaviour in Elsternwick, police said.
Police intercepted the vehicle on Church Street, where it struck another vehicle before five youths attempted to flee on foot in front of shocked cafe-goers and locals.
Police gave chase and pounced on two 16-year-old males from Clyde North and Dingley Village and a 16-year-old female from Carrum Downs.
They were arrested and are currently being interviewed.
Two more occupants from the car remain on the run.
No one was injured in the incident.
Church Street is renowned as Brighton’s “premier shopping and dining retail strip” and features high-end fashion boutiques, restaurants and cafes.
Anyone with information is urged to contact Crime Stoppers on 1800 333 000.