The 51-year-old Peterhansel added the 2017 title to his previous six wins on four wheels and his six on two, the first coming in 1991 on the world's toughest rally.

"This victory is particularly sweet because the competition was so high," said Peterhansel. "Battling Sébastien and finishing just a few minutes ahead, it's no mean feat."

Sam Sunderland became the first Briton to win the motorbike section after the heartbreak of being forced to retire from two previous editions.

The KTM rider secured victory after the 12th and final 64km special from Rio Cuarto and Buenos Aires.

Peterhansel and nine-times world rally champion Loeb dominated the gruelling two-week car race winning eight stages between them with the former taking three and the later five. 

Peterhansel finished 5min 13sec ahead of Loeb in the overall standings with third-placed Cyril Despres at 33min 28sec handing Peugeot their first podium sweep since 1990, before the French car maker withdrew from the race to return in 2015.

Despres also won a stage for Peugeot who grabbed control from the second stage leaving rivals Toyota and Mini with no chance.
                  
'Better next year'               
                  
The race turned into a two-horse battle between Peterhansel and 42-year-old Loeb, who was competing for the second time after finishing ninth in 2016.

"Such a tight Dakar to the finish line we haven't seen in a longtime," said Peterhansel, who first competed in 1988 before winning in 1991.

Loeb added: "We gave it everything, held nothing back. We had a beautiful race. Second this year, we'll have to do better next year."

Qatari Nasser Al Attiyah -- winner in 2011 and 2015 -- was forced out in the fourth stage after badly damaging his Toyota with Spaniard Nani Roma and South Africa's Giniel de Villiers finishing fourth and fifth respectively for the Japanese manufacturer.

Earlier Sunderland became the first Briton to win the motorbike section after the heartbreak of being forced to retire from two previous editions.

The 27-year-old Dubai-based Briton entered the 2012 and 2014 Dakar rallies but retired each time with mechanical problems. 

Sunderland took the race lead after the fifth stage, handing KTM their 16th win in a row.

The 2016 winner, Toby Price of Australia, pulled out of this year's race during the fourth stage.

The gruelling 9,000km rally had been plagued by torrential rain in Bolivia with stages six and nine cancelled and a further three shortened, cutting a third off the original course.