Defending World Rally Champion Sebastien Loeb knows he is stepping into the lion's den in this week's Rally New Zealand.

The Citroen driver comes to New Zealand for Round 11 of the FIA World Rally Championship trailing arch rival Marcus Gronholm (Ford) by eight points with six events remaining.

While Loeb won in New Zealand two years ago, the Frenchman knows he must overcome his great rival who will be racing on his favourite gravel surfaces.  Gronholm has reigned supreme in New Zealand and he will become the most successful driver in the 38 year history of event if he wins for a fifth time here this weekend.

"The last rally I won in Germany and before that Marcus won in Finland.  So we are both in good form," Loeb said.  "I know that Marcus in New Zealand is really fast so it will not be easy to win here.  It's one of my favourite rallies but I know Marcus has won a lot of times here."

Loeb said close attention to detail during the two days of reconnaissance will be important.  He missed last year's Rally New Zealand recovering from injury and was limited to the reconnaissance phase.

"I am disadvantaged a bit that I only did the reconnaissance last year because the stages were new last year and I don't have a lot of experience.  I hope it won't be a big disadvantage and I can fight for the victory."

Gronholm enjoys the fast flowing gravel roads of New Zealand which are similar to the surfaces in his native Finland, while Loeb is rated almost unbeatable on tarmac.

Loeb believes while the battle will be fierce he cannot be counted out on the gravel, despite his lack of racing knowledge on the roads.

"I won a lot of rallies at the start of the season on gravel.  It is a fast rally and I know Marcus is fast here.  But last year I had a big fight with him in similar conditions."

For Loeb it is a balancing act at the crucial round in New Zealand before he returns to three of the final five rallies of the year on tarmac to make a charge for his third World Championship title in a row.

"If I beat Marcus here then for sure it will be for the victory because he is fighting every rally at the first place.  The most important thing for me in New Zealand is to try to beat him.

"If not then it is important to keep in contact and not lose too much to Marcus."

Loeb is pleased with the development of the Citroen C4 and believes it can do the job here.

"We have to adjust the settings a bit in the Citroen here but nothing major.  The car is going well."

The 11th round of the FIA World Rally Championship will be based in Hamilton, heading to the King Country, Waikato and Franklin districts from this Friday.

Rally New Zealand starts with the traditional shakedown test at Mystery Creek tomorrow ahead of the Ceremonial Start in Hood Street, Hamilton in the evening.

The rally proper begins on Friday with four stages in the Otorohanga and Waitomo region, day two is in the Franklin District and northern Waikato and final day in Raglan, with Super Special stages each day back at the Rally Headquarters and Service Park at Mystery Creek.