The Spaniard had been navigating through the opening stage (Isegami’s Tunnel 23.29km), when he was forced to stop his i20 N 16.1km into the test after reporting a burning smell.
Sordo and co-driver Candido Carrera quickly exited the car before a large fire broke out engulfing the vehicle. Attempts were made to put the fire out but the blaze had become too severe.
M-Sport’s Gus Greensmith was the first driver to reach Sordo. The Briton stopped to help the crew before officials threw the red flags due to the severity of the incident.
"It was coming really quickly since the beginning of the stage," said Sordo. "The car was smelling of petrol a lot and just here in a straight line the fire was coming between the seats with a lot of smoke, so I stopped the car.
"After a few minutes it started to burn. It was coming from the rear and we tried to put it out but it was absolutely impossible. I'm sorry for the team - to lose a car like this, it's a bad day."
The FIA subsequently announced that the following Inabu Dam stage would also be cancelled.
The fire was reminiscent of the blaze that ignited Oliver Solberg’s i20 N following a crash during Rally Croatia in April. At this stage, it is unclear what ignited the fire on Sordo’s car.
The blaze was among several dramatic incidents on the tricky sinuous opening asphalt test of the 19-stage rally.
Eight-time world champion Sebastien Ogier suffered a puncture during the pass, which resulted in the Frenchman, partnered by new co-driver Vincent Landais, dropping almost three minutes.
"I have no idea to be honest - it was very narrow with not a lot of grip in the road and I didn't feel anything, our race is already over," said Ogier, who dropped behind M-Sport’s Craig Breen on the road.
Team-mate Kalle Rovanpera won the stage despite battling understeer and smoke that emerged inside the cockpit.
The new world champion unhappy with the handling of his car was 1.8s faster than Hyundai’s Thierry Neuville, which was enough to take the lead of the rally.
"I had a lot of understeer and on these kinds of roads you kill the front tyres and you can not drive at all," said Rovanpera.
"Halfway through the stage something started to smoke in the cabin - we're not sure what it is so we have to check."
Elfyn Evans was third fastest ahead of Hyundai’s Ott Tanak, who was forced to briefly stop in the famous Isegami's Tunnel due to the dust kicked up by Rovanpera, who passed through two minutes earlier.
“We stopped in the tunnel because it was full of dust and we couldn't see beyond the bonnet,” said Tanak.
After losing a handful of seconds stuck behind Ogier on the narrow asphalt roads, Breen came through in fifth ahead of Takamoto Katsuta, before the stage was halted due to Sordo’s incident.
Crews are set tackle five more stages to complete the opening leg of the rally.
