Frenchman Cyril Despres steered his Peugeot to victory on the second day of the Dakar Rally on Sunday, speeding across 267km in 2hrs 56min 51sec on the dunes of Ica along the coastal roads around Pisco in Peru.

His win puts him top of the overall standings, 27sec ahead of his teammate and defending champion Stephane Peterhansel, with South Africa's Giniel De Villiers, who was originally announced as Sunday's winner in his Toyota through a timing error, now sitting third and 5min 44sec off the pace.

"That was a great day," said Despres, a five-time winner at Dakar in the motorbike section.

"It's the first time our car has been in these conditions. Big, easy to climb dunes as well as very soft plateaus. We saw others stuck in the sand (notably Carlos Sainz) but we avoided that."

Run around Pisco, which is known for its local liquor of the same name, Sebastien Loeb also enjoyed the dunes and recovered from a horror show on Saturday, which saw him suffer a brake failure, to climb to fourth overall.

"It went better than yesterday," said the nine-time world rally championship winner who is bidding for his first Dakar win.

Loeb, who was third on the day to complete a Peugeot sweep, said it had been confusing in the dunes to find the best path.

"We always follow the tracks because we don't want to lose them. We've got much to lose if we can't find a waypoint. For example, near the end, we had to look hard for the last one."

"We want to make it out of Peru in good shape," he said.

Two-time winner Nasser Al-Attiyah steered his Toyota to victory on the opening stage of the 9,000km Rally on Saturday, but he had a bad day Sunday after his co-driver fell sick.

Another driver who had a poor day was Argentine Lucio Alvarez, who barrelled his Toyota down a dune, eventually emerging unscathed from his upturned vehicle.

Monday's third stage runs from Pisco to San Juan de Marcona with a 502km run along the Pacific coast with 295km of specials.

The first entrant to pull out was Mini driver Bryce Menzies who wrecked his car, injuring his co-driver's ankle in the process.

In the motorcycling section, Spain's Joan Barreda produced a late burst on his Honda to climb from fourth overnight to top of the overall standings with his 20th Dakar stage win.

Barreda covered the same course as the cars in 2hrs 56min 44sec, 02min 54sec ahead of France's Adrien Van Beveren (Yamaha).