Defending champion Toby Price has rued poor execution after relinquishing the Dakar Rally lead during the third round of the gruelling motorcycle race.

The Australian Red Bull rider was displaced by Spaniard Joan Barreda, who gained a 10 minute lead after finishing the stage in 4:23.41.

After winning the second stage, Price fell to fifth place overall after coming ninth at San Salvador de Jujuy in Argentina on Wednesday (Thursday AEDT), 16.19 behind the leader.

“I made a little mistake their near the end,” Price said.

“It looked like the bunting had all tapered off down the side to get into the river bed and you couldn’t quite catch the finish there.

“We definitely lost a bit of time today, but there’s still a long way to go. We’re only three days in.

“Hopefully my bad day is over and done with now and the rest of the days will be good”.

The 29-year-old Price became the first Australian to win the two-week race in any category last year.

The third stage extended 780km across northern Argentina from San Miguel de Tucuman to San Salvador de Jujuy, with a two-part timed portion of 364km.

In the car competition, the stage ended with a 1-2-3 finish for Peugeot.

Frenchman Stephane Peterhansel turned in the fastest time of 4:18:17, followed by Spain’s Carlos Sainz and compatriot Loeb, who leads his Spanish teammate by 42 seconds in the overall.

Peterhansel is in third place.

Thursday’s (Friday AEDT) fourth stage will cover 521km from San Salvador de Jujuy to Tupiza, Bolivia.