Peugeot's Marcus Gronholm leads the Telstra Rally Australia at the end of leg 1 today [Friday], having won five of the nine stages.

Gronholm, who took the lead on the opening test, was never headed and is 21.4 seconds up on Sebastien Loeb, who lies second in his Citroen Xsara WRC.

"I'm very happy with the way that things have gone," said Gronholm, "which is a tribute to all the hard work that the entire team has put into the development of our new 307 WRC. We've been trying to go at a sensible pace all day: pushing quite hard but not taking any stupid risks either.

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"Apart from that there is very little to report - we just have to try and do the same again tomorrow."

Loeb was first on the road in the most slippery conditions but admitted that the damp weather meant loose gravel was not as much of a problem as usual.

Harri Rovanpera meanwhile climbed to third and remained there, despite clipping some trees and overshooting a junction.

"It's been a very good day," he said. "Although I missed the last two rallies I've felt very confident with my car and I have been able to attack. I still think that there is a little more to come and I hope to be able to show that during leg two tomorrow."

Francois Duval and Mikko Hirvonen are fourth and fifth respectively, the last of the works drivers, Hirvonen challenged Duval hard until brake problems caused the Finn to hit a tree stump and break his cars power steering on SS7.

"It's been quite a tough day, especially with the brake problems on the later stages, but when things worked well I was getting more confident on the stages and that helped a lot," stated Hirvonen. "Now that we've established a good base set up with the car though I'm looking to carry on the progression tomorrow, I'm looking forward to it."

Antony Warmbold is next up in sixth, the leading privateer, while Alister McRae leads the Production Car WRC category, in seventh overall, 45.6 seconds up on Karamjit Singh, who is the next best in the class.

Chris Atkinson completes the top eight, followed by fellow Aussie's Cody Crocker and Dean Herridge.

There were two major retirements today, Markko Martin going out even before the start of SS2, after engine problems in SS1 Thursday night, while Petter Solberg hit a rock and damaged his suspension in SS4. The Norwegian, who returned for the concluding Super Specials, had been running second overall.

"It's too bad, I didn't want to end the season like this, but that's just how it is sometimes," said Solberg. "Before the incident on SS4 things had started well and I had a good feeling about the event, but we were pushing hard and after the impact there wasn't anything we could do. The damage was actually very little so it was good to get back out in time for the Super Special this evening."

Double world champion Carlos Sainz was a pre-event casualty when the Spaniard crashed into a tree during practice and injured his neck. He withdrew from what was scheduled to be his last rally before retirement.

In total 40 competitors completed the first leg, 63 having started on Thursday night.

The second leg tomorrow [Friday] is based east of Perth and covers 127.15km of competition. After leaving the city at 08.00, drivers face eight speed tests close to the small town of Mundaring, before two final stages at the Gloucester Park trotting track on the edge of Perth. Cars enter the final overnight halt at 20.02.