Organisers said the 46-year-old 2012 Olympic shooting bronze medallist had not started the fourth stage from San Salvador de Jujuy to Tupiza in Bolivia.
Al-Attiyah had won this year's first stage, was runner-up in the second and was poised to retake the overall lead in the third from France's nine times world rally champion Sebastien Loeb when he went off-track and crashed into a hole.
He had recognised on Wednesday that his hopes of a third overall win had disappeared.
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"Game over. A bad day," he told the Dakar website (www.dakar.com) after ending the day 32nd overall but still hoping to continue competing.
"We stopped to repair but we could not. We don't have all the parts.
"It was a mistake ... it's bad luck but this is the race. This is how the Dakar is. We were doing a really good job, we were leading but there you go."
The Qatari had already had a lucky escape on the opening day when his car caught fire after a leak sprayed oil on the exhaust.
In other drama, it emerged on Thursday that Slovakian KTM motorcycle rider Ivan Jakes had been hit by lightning 300km from the finish on the previous day's stage.
He continued riding but was taken to hospital for checks after reaching the finish. Doctors later cleared him to continue in the race.
(Reporting by Alan Baldwin; Editing by Hugh Lawson)
