In dry, dusty conditions Finnish Volkswagen driver Jari-Matti Latvala leads by two seconds from Citroen's Kris Meeke with two-time WRC champion Sebastien Ogier a further 2.6 seconds further back in third in another Volkswagen.
With the championship-leading Volkswagens forced to drive first on the road and encounter the worst of the loose gravel, Meeke and Hyundai drivers Dani Sordo and Haydon Paddon took advantage of their road position to occupy the top three spots respectively after the morning loop of four stages.
The day's longest stage, the 29.51km Newry, proved pivotal in both morning and afternoon loops. Having opened up a seven-second lead, Sordo lost time after stalling the engine thanks to a gearshift problem, while Paddon struggled with tyre wear on the dry, abrasive roads.
Sebastien Ogier made his move on the second run through Newry, the last stage of the day, taking 4.5sec from team-mate Latvala and 11.2sec from Meeke to vault from sixth to third in one stage, despite complaining of transmission troubles.
He was helped somewhat by hanging dust, which restricted visibility for those running further down the field.
Ogier will have his work cut out as he is forced to run first on the road tomorrow as well. There are only four stages, however two of those are runs through the marathon 50.80km Nambucca stage. The final stage of the day will be held at night, and Ogier could gain a big advantage if today's dust problems reoccur tomorrow evening.
Australian Scott Pedder crashed out of WRC2 on the first stage of the day in the Ford Fiesta R5, however he will restart tomorrow. Local driver Nathan Quinn, driving a Mitsubishi Evolution IX, is running an impressive fifth in WRC2 against much faster international-level machinery.
Overall after Day 1
1. Jari-Matti Latvala/ Mikka Anttila Volkswagen Polo - 1:15:29.1
2. Kris Meeke/Paul Nagle Citroen DS3 - +2.0
3. Sebastien Ogier/Julien Ingrassia Volkswagen Polo - +4.6
4. Andreas Mikkelsen/Ola Floene Volkswagen Polo - +12.9
5. Dani Sordo/Marc Marti Hyundai i20 - +15.9