Latvala retired on just the third gravel corner of the rally after hitting a stone on the Cubilete test.
The impact broke the track control arm on the VW, leaving the front-right wheel moving forwards and backwards in the wheel arch.
"I saw the stone very late," said Latvala, "so I tried to take it in the middle of the car. The stone flicked up and hit the TCA and broke it.
"The team have looked at the part now and they say they have to reinforce this, it's not strong enough. This is not something we have seen in testing.
"I think that now the team will be looking at the TCA on Ogier's car and changing them at every service to monitor the wear on them."
Latvala will return to the Leon-based event under Rally 2 regulations on Saturday. He says his focus will be on finding the limit of the Polo.
"I still don't know where the limit is," he said. "And now, in a way, some of the pressure is gone for me and I can relax and focus on the driving. Last time in Sweden I could not do this because I was in the race.
"Of course, I am disappointed. This has been a bad start to the year, but hopefully all the bad luck has come at once and now I we can move on.
"I told the team when I came in: 'I know my reputation is bad, so I want you to look at the onboard!'
"There wasn't anything we could do this time. My co-driver [Miikka Anttila] is normally really calm, but he was swearing a lot when this happened. I didn't swear, I was just too shocked that we had stopped."