Toto Wolff says that Mercedes will not get carried away after "promising" signs back at the factory.
The team have faced a difficult start to the 2023 F1 season, with the W14 unable to match the pace of Red Bull and Aston Martin during the opening races of the campaign.
However, George Russell and Lewis Hamilton finished ahead of both Ferraris in Saudi Arabia, and Wolff feels that the team can take positives from the event.
"The progress we saw in Saudi Arabia was encouraging," Wolff explained in a preview of the upcoming Australian Grand Prix.
"We maximised the package we had and scored some solid points. More importantly, we continued to learn and understand more about the W14 and our development
"Everyone back at base has been hard at work to turn these learnings into performance."
'Promising' signs for Mercedes
This ongoing work appears to be bringing results, according to Wolff, but the Austrian insists that the team will not be happy until the performance on track reflects this.
"The signs we are seeing back at the factory are promising," he commented.
"We have got to take it step by step, though, and won't get carried away until we see performance translated into lap time on track.
"The competitive order behind Red Bull is tight, with small margins having a big effect on points scored.
"There remains a significant gap to the front and that is ultimately what we are interested in closing."
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What can Mercedes achieve in Australia?
Wolff believes that Mercedes will have to "work hard" to adapt the W14 to the Albert Park Circuit, yet remains hopeful that they can maximise the car that they currently have.
"We are looking forward to Australia," the Team Principal said.
"It's a country serious about its motorsport with a great racing tradition, and the fans are super passionate.
"Albert Park is a circuit with unique characteristics, which we will have to work hard to adapt to with the W14.
"As always, we will look to maximise the car we have, and score as many points as our potential currently allows.
"We are not where we want to be – but that won't stop us from racing hard and giving it everything we've got."
Join Balve Baines, RacingNews365.com journalist Michael Butterworth and Dieter Rencken, Editorial Director of RacingNews365.com, to discuss the key talking points ahead of the Australian Grand Prix.