Vatanen was born in Espoo but grew up in rural Tuupovaara in Eastern Finland. His debut year in professional rally was in 1970, and he became World Rally Champion in 1981 with Ford, at the wheel of an Escort RS1800. He has won the Paris-Dakar Rally three times with Peugeot, in 1987, 1989 and 1990, and again with Citroën in 1991. With Peugeot, he has also won the famous Pikes Peak International Hillclimb, after Peugeot stopped participating in the world rally championship series in 1986, due to the demise of Group B rally. Peugeot used the lessons learnt from its 205 T16 to create the 405 T16. With at least 600bhp, huge aerofoils, four-wheel drive and four-wheel steering, the talented Vatanen took the car up the hill in record time, his efforts being captured in the award-winning short film "Climb Dance".
Following his years of working with a French rally team, in 1993 he settled in southern France where he bought a farm and a winery. He soon developed an interest in politics, and in 1999 he was elected to the European Parliament from the list of the conservative Finnish National Coalition party, despite continuing to live in France. The issues he has worked on include car taxation, traffic policies, development aid, and agricultural policy.
His hunger for motorsport had not left him completely however, and Vatanen joined Nissan in the Paris-Dakar in 2003, finishing 7th. He returned in 2004, and is set to make another attempt.
In 2004 he was re-elected, this time from the list of the conservative French Union for a Popular Movement.