New Zealand rally driver Hayden Paddon has missed out on a drive in the 2019 World Rally Championship.

Paddon has been dropped from his role with Hyundai Motosport, with nine-time WRC champion Sebastien Loeb joining the team in his place.

Paddon raced in seven of 13 events for Hyundai this year and had hoped he'd done enough to earn a gig next year after finishing second in Australia last month – a result which helped him finish eighth in the drivers' championship.

He was also on the podium with a third in Turkey, was fourth in Italy and Finland, and fifth in Sweden.

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Instead, Loeb joins Dani Sordo, Thierry Neuville and Andreas Mikkelsen to make up Hyundai's roster for next season, but team principal Michel Nandan said they were still in dialogue with Paddon.

"We are also still in talks with Hayden to see how we can work together into 2019. He is a great talent."

However, Paddon said he was offered just one rally for next year and believed he wouldn't be racing in the WRC next season.

"It's with an extremely heavy heart and it's certainly not easy to say it, but there will be no WRC for us due to there being no opportunities," said Paddon.

"I'm obviously disappointed to be in this position but at the same time I also understand that can be the reality of professional sport - there simply aren't many opportunities in the WRC at the moment."

The 31-year-old noted that he finished with the second most points in the team per rally started but is resigned to not adding to his five years with Hyundai.

"The last few months have been mentally very difficult – there's been many discussions in the background and we've been promised many things which haven't come to fruition.

"This certainly isn't the last you'll hear of me – this is just a small bump in the road."