Michael Schumacher believes that the Mercedes W02 could now be the car most likely to challenge Red Bull at the front of the field after the German manufacturer's encouraging end to pre-season testing.
Mercedes began the year amid concerns that its car lacked pace during initial running, but a major update brought to the final test at Barcelona revealed the W02's true potential.
The seven-time world champion was in buoyant mood as he spoke to the press in Melbourne ahead of the first grand prix of the season this weekend, saying that he now expected to be able to fight near the front with the improved Mercedes.
"I am looking forward to it after winter testing," he said. "Mercedes has done a huge step forward with this year's car, it is a very performance-orientated car and it has paid out.
"This weekend it is up to us to prove it, and we have a good opportunity to prove good things. Nevertheless we should not overestimate things, and see the truth - and that is that Red Bull Racing is most likely the team to be beaten.
"I think we are going to play an important role just behind that. And whoever is behind that group, I see Ferrari, Renault look good, Williams look good, McLaren is not to be forgotten because I expect them to be stronger than they were in testing, and us - this is the pack that I see a good opportunity that we might be able to fight for that position to be the second fastest."
Schumacher said that it was too early for him and Mercedes to think in terms of world championships and that podiums and perhaps a race win were more likely to be achievable targets in 2011.
"I think this year our target and our realistic possibility would be to fight for podiums and if things go very well then maybe to win a race," he said. "Does this put us in a position to fight for the championship? No.
"You have to be careful with this one. I don't think we are yet ready prepared and developed for this. If it comes, the opportunity we will be there and you can be sure we will try to catch it, but we will see step-by-step. Where we were last year, where can we be this year and play it realistically, not unrealistically."
Asked whether podiums would be enough to satisfy the 42-year-old 91-time grand prix winner in the second year of his return to the sport, Schumacher replied: "I expressed myself last year very clear and it hasn't changed. The most important is to fight for the championship at the time we are ready for it.
"To be on the podium would be great, but does it really change anything? No. What does change is if we can achieve our target to win a championship together with Mercedes. That is what I want to achieve and that is what I am here for and that is what we are fighting really hard for.
"Are we ready right now? No. Can we win a race? Maybe. Would it satisfy me? Absolutely, I would be thrilled about this, no doubt, and it is all about winning at the end of the day."
Schumacher added that while he was already well motivated, the positive performance of the car was an extra boost to begin the season with.
"Fired up is the permanent development we have in F1, and clearly if you see where we are right now and how we arrived there, to now be in a position to fight for a podium, that is already a bit advantage and a big thrill," he said. "And with this I just know that it will come with time and if you work as we started last year at a much lower base than we anticipated, that is the big part I enjoy to constantly work up and build it up to a point of success."
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