The Finn was quickest through the 3.80km Hautepierre Parc des Sports test next to the Strasbourg service park by 1.2sec in a Volkswagen Polo R.
Kris Meeke was second in a Citroen DS3, with championship leader Sébastien Ogier’s Polo R and Dani Sordo’s Hyundai i20 tying for third, a further 0.5sec behind.
Latvala set the pace throughout the morning and posted the fastest time on his fourth and final run over the tight and twisty service roads around the sports and leisure complex.
“I struggled a little in the test with understeer and was a bit worried how the car would be in shakedown, but on the first run it felt really good,” said Latvala. “We made a couple of changes to the set-up and I felt it was getting even better so now I have a good feeling.”
The Finn has made no secret of his desire to win on asphalt but missed out at August’s ADAC Rallye Deutschland when he crashed out of the lead on the final morning.
“My dream is to win an asphalt rally and I was so close at Rallye Deutschland. But I was against myself and didn’t do it, so we’ll try to carry on and work on that over here.
“If we can win, the victory would help in the drivers’ championship but I’m not thinking about that so much anymore. My chances are not the greatest and Seb, with a smart drive, doesn’t need to take risks,” he added.