Niki Lauda says he feels that Mercedes can make forward progress to fight for a place in the top three during the 2013 F1 season.
The team endured a difficult 2012 after failing to build on Nico Rosberg's victory in China, slipping further off the pace as the year wore on to end up down in fifth in the standings.
For the new campaign, the team fields a new look line-up having signed Lewis Hamilton to partner Rosberg and Lauda – now a shareholder in the Mercedes team – said he felt sure that the team would be a contender during the year ahead.
"The cars are relatively close together," he told Bild
as he reflected on the opening test of the year at Jerez. "In my view, Vettel is the fastest at the moment. The Red Bull works well and looks reliable. He is a bit faster than the rest, but my joy is that Mercedes can now compete with the top three teams.
"The tests are there so you can eliminate errors. Nico and Lewis have been so busy in the final days. The two failures on the first days were made up for."
Lauda, often outspoken in his comments about the sport, also pulled no punches when asked about the smaller teams on the grid that have struggled for sponsorship for the year ahead – arguing that their issues were down to a lack of performance on track.
"Anyone who comes into Formula One - the highest class - chooses to," he said. "So I have no pity when a team gets into financial problems. I don't know what everyone's getting excited about.
"The Spanish team just did everything wrong they could do wrong. They were poorly organized and had a bad car.
"It's right that if you do a good job, you earn more money. Simple as that.
"Now and again, over the past 30 or 40 years, Formula One has had financial problems, and just like before it will settle down again."