Gronholm was forced to retire with gearbox failure on stage eight

Gronholm's Ford was penalised for failing to finish the eighth stage, promoting Loeb's Citroen into the lead, which he held until the end of the day.

Frenchman Loeb spun on stage three but fought back to pass Petter Solberg for second place by the end of stage six.

Solberg led after four stages, but dropped back with a puncture.

Loeb, who leads the championship by 11 points from Gronholm, is gunning for his fourth consecutive win.

Gronholm had led Solberg by 1.8 seconds after Thursday night's superspecial sprint stages in Cordoba's floodlit football stadium.

The Finn's cause was not helped by his car's windscreen wipers failing in the light drizzle during the 23km third stage from Ascochinga to La Cumbre, on which Solberg took an eight-second lead.

But Gronholm fought back into the lead on stage five, and was eight seconds ahead of Loeb heading into the fateful stage eight.

Solberg moved back up to second place despite hitting a post and ended the day 19.8 seconds behind Loeb.

The Norwegian suffered two punctures and an incurred a 10-second penalty for being a minute late to a time control.

Gigi Galli, in a privately-entered Peugeot, is third with Austrian Manfred Stohl, also in a Peugeot, fourth after winning the final stage of the day.

There are two days still to run in the rally, which finishes on Sunday.

Standings after first leg of Rally of Argentina

1 Sebastien Loeb (France), Citroen, one hour 53 minutes 58.700 seconds
2 Petter Solberg (Norway) Subaru +00:19.800 secs
3 Gianluigi Galli (Italy) Mitsubishi 00:59.400
4 Manfred Stohl (Austria) Peugeot 01:12.100
5 Henning Solberg (Norway) Peugeot 01:31.800
6 Daniel Sordo (Spain) Citroen 02:15.100
7 Chris Atkinson (Australia) Subaru 02:29.400
8 Matthew Wilson (Britain) Ford 04:08.700
9 Luis Companc Perez (Argentina) Ford 04:46.100
10 Gareth Mac Hale (Ireland) Ford 07:07.200