Nico Rosberg drew first blood for Mercedes in the new Formula One season with a dominant Australian Grand Prix victory on Sunday after pole-sitter Lewis Hamilton and world champion Sebastian Vettel retired with reliability problems.

Vettel's early exit ended the Red Bull driver's record run of nine successive victories racked up since last August.

While one German smarted, another celebrated as 28-year-old Rosberg capitalised on a brilliant start from third on the grid, snatching the lead before the first turn and roaring to a 24.5-second victory ahead of Red Bull's Australian Daniel Ricciardo.

On an overcast day at Albert Park, Danish rookie Kevin Magnussen shone with a brilliant third place finish for McLaren, emulating Hamilton's first effort for the British team at the same Grand Prix in 2007.

The result meant all three men on the podium had beaten world champion team mates in a stunning triumph of the underdogs.

Rosberg, tipped to duel with team mate Hamilton for the championship, celebrated his fourth race victory and first since last year's British Grand Prix, when he was also the beneficiary of technical mishaps to Hamilton and Red Bull's Vettel.

"Brilliant stuff, what a car you've given me! What a car!" the thrilled German said over the team radio after crossing the line.

"The car was just really, really quick today," the German later told reporters, looking forward with relish to the next race in Malaysia in two weeks.

"A really good engine, not much problem with fuel consumption. It just all worked perfectly."

The gaping margin of victory underscored Mercedes' superior preparations for F1's technical revolution, which saw all teams struggle during winter testing with the new V6 turbocharged hybrid engines.

The glitches continued as only 14 of the 22 cars finished on a gusty day at the bumpy street circuit which was doused by a brief rain-shower early in the race.

Hamilton, who snatched pole position at the end of a wet qualifying session on Saturday, noticeably lacked power on his start and was called in by his team to retire on the third lap.

Mercedes later clarified his car had suffered a misfiring cylinder. "We will recover from this, it's only a small hiccup. There's a long way to go still," Hamilton told Sky television.

"At the moment I'm not concerned about anything."

FIRST AUSSIE

Twelfth off the grid, Vettel also struggled at the start and retired only a few laps after Hamilton, complaining of engine performance problems.

Ricciardo, who replaced compatriot Mark Webber at Red Bull after crossing from sister team Toro Rosso, thrilled home fans by taking his maiden podium spot in his first race with his new team and drove with admirable composure after being challenged by Magnussen over the closing laps.

The runner-up finish was a boost for the Milton Keynes-based team, who endured a dismal winter testing in which neither driver was able to complete a race simulation.

"Two, three weeks ago, I would have bet pretty much anything we have that we would not be standing up here," the 24-year-old said after becoming the first Australian on the podium at his home Grand Prix since the race has been part of the championship.

"First Aussie on the Aussie podium, so really proud."

Magnussen's podium was the first by a Dane in Formula One and McLaren's first since 2012, the 21-year-old outshining 2009 champion team mate Jenson Button, who finished fourth in front of Ferrari's two-time world champion Fernando Alonso.

Williams driver Valtteri Bottas finished sixth for his best F1 result after an outstanding race from 15th on the grid, having also overcome a punctured rear tyre after brushing a barrier.

His eight-point haul was more than his team scored in all of last season.

His new team mate Felipe Massa was unable to add to the tally, however, having been taken out of the race at the first turn by Caterham's Kamui Kobayashi.

The Japanese ploughed into the back of Massa's Williams, enraging the Brazilian and prompting an FIA investigation.

Kimi Raikkonen's eighth-placed finish behind Force India's Nico Hulkenberg capped a frustrating return to Maranello for the 2007 world champion, who started 11th on the grid after a crash during qualifying.

Russian rookie Daniil Kvyat finished 10th on his debut for Toro Rosso, becoming at 19 years old the sport's youngest points scorer.

Lotus's insipid race weekend finished with both Romain Grosjean and Pastor Maldonado unable to complete the race due to reliability problems.

The race stumbled at the start, with Marussia driver Max Chilton stalling on the grid before the pre-start installation lap and his team mate Jules Bianchi then repeating the mishap.

Bianchi, along with both Caterhams, was unable to finish.