Caterham now has the package it needs to join the close fight in the midfield this season, according to Scuderia Toro Rosso team principal Franz Tost.
Although Caterham, under the Lotus moniker, has been the best of the new teams for the past two campaigns, it has not been quick enough yet to regularly challenge the more established outfits.
However, with stability on the engine front and the addition of KERS this year, Tost thinks his Hingham-based rivals should now make a good step forward in 2012.
"The main competitors for us are Sauber, Force India and Caterham," said Tost, during a media briefing at Jerez on Tuesday.
"Caterham, they have now built up a good infrastructure. They have the Renault engine, they have the KERS system from Red Bull, and that means their package from the technical side is quite strong. They have two experienced drivers and I expect them to become a competitor this year, yes."
Tost says that he wants to see his Faenza-based team make progress itself in 2012, with him demanding it finishes better than the eighth place result in the Constructors' Championship it achieved last year.
"Our target is the seventh place. We must be better than last year, where we finished in eighth position."
Daniel Ricciardo gave the new STR7 its first track test at Jerez on Monday and Tost said he was pleased with early progress.
"The car looks nice but the important thing is that the car is fast," he said. "My first impression is that the basis of the car is quite good. I was just on the track in some corners and although we did only a few laps because we still have to do some tests on the car, I think the basis of it is healthy. I hope that we will do a good step forward with this car to improve our performance."