Frabce's Sebastien Ogier and co-driver Julien Ingrassia compete in the Sweet Lamb stage of the Wales Rally GB, the penultimate stage of the FIA World Rally Championship, near the village of Llangurig in Mid Wales on October 6, 2018. (AFP)

Reigning champion Sebastien Ogier has taken the lead at day three of the Rally of Wales after Toyota's Ott Tanak retired with mechanical problems, ending his hopes of a fourth win in succession.

Tanak, who had arrived in North Wales on the back of victories in Finland, Germany and Turkey was leading Ogier by 41 seconds when he stopped at Stage 16 due to mechanical problems which forced him to retire from the race.

Ogier finished 5.5 seconds ahead of Toyota's Jari-Matti Latvala and a further 5.3 seconds in front of Esapekka Lappi.

Meanwhile, championships leader Thierry Neuville of Belgium finished in 8th place. The Belgian leads in the three-way championship race, 13 points ahead of Tanak and 23 ahead of Ogier.