Latvala had led the event at the end of the asphalt stages and was in a strong position to take his victory in the Polo, before a front differential problem stuck on the final loop.
The Finn spent much of the final stage with just three-wheel drive and dropped behind Ogier to finish second.
It was the second time a significant transmission problem has knobbled Latvala on the final day of an event.
"Jari-Matti drove a fantastic event," said Capito, "and we are really sorry for what happened.
"It was a little bit like Australia, when we were getting ready to celebrate Sebastien's drivers' title and something happened.
"Just when we were starting to think about the manufacturers' championship we got the call from Jari-Matti's car."
Capito was quick to praise both of his drivers, adding: "We celebrated two rally wins in Spain.
"Jari-Matti was waiting for his first asphalt rally win and we think this came on Saturday night at the end of those stages and then we celebrate with Seb. The way he came back from losing 50 seconds with the puncture shows he can do miracles!"
- Sports & Recreation