Eight-time world champion Sebastien Loeb showed his class on the first day of the Rally New Zealand to hold a four-second lead over teammate Miko Hirvonen after leg one.

Fastest qualifier Jari-Matti Latvala won the day's opening stage but fellow Finn Hirvonen seized the initiative to lead the field after the penultimate stage this afternoon.

But Loeb was always right on the tail of his Citroen teammate and won the day's last stage to turn a 4.6-second deficit into a 4.0-second advantage.

Loeb, the defending champion and current World Rally Championship series leader, claimed five stage victories on the roads around Huntly and Raglan, with a bold tactical decision paying dividends.


Loeb and Hirvonen both benefited by electing to start at the front of the field throughout the day's racing, hoping the predicted rain would arrive and bring with it muddy roads and perilous driving conditions for the last cars out.

Among those cars was Latvala's Ford, with the Finn taking the opposite strategy and starting at the back of the field to attempt to benefit from those before him clearing the roads of loose gravel.

Latvala's tactical gamble appeared to pay off in the day's first stage, but from there it was all the Citroens.

Hirvonen claimed the second stage and, despite finishing behind Loeb in the next three stages, still held a slim lead heading into the final three races of the day.

He increased that advantage by winning the sixth stage but Loeb took the final two to sit atop the standings.

"I am having so much fun and this is a really great battle with Seb to be exchanging times back and forward like we are,'' Hirvonen said.

Latvala's day turned from bad to worse on the penultimate stage when a mistake cost him four minutes and dropped him from third to ninth in the standings.

The Finn become tangled in a fence after an attempted cut on an inside corner went wrong and needed help from spectators to get going again.

Meanwhile, New Zealand's Hayden Paddon endured a mixed day in the Super-2000 class, easily leading the field through the eight stages before suffering gearbox issues during the latter stages.

The clutch on Paddon's Skoda wasn't operational by the day's end and he was left with only second and sixth gears, leaving him facing a potential penalty for being unable to make it back to the Rally's headquarters in Auckland.

Paddon was confident of reaching the city and fixing the problems overnight despite some ``fun'' at traffic lights, but the possible five minute penalty will barely eat into his 25-minute lead over the other cars in the S-2000 class.