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Toto Wolff expects Mercedes to face more of a challenge in 2017.
Next year will see Formula One go through a raft of technical regulation changes and the Mercedes motorsport boss thinks they will allow Red Bull to close the gap.
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"Red Bull clearly have a more competitive package as Renault has improved a lot," he said. "And next year the new regulations clearly give huge opportunities.
"We were expecting Hungary to be a very difficult one and Red Bull to be performing well and it was the opposite, we were actually as strong as in Silverstone," he added. "But Hockenheim could have been won easier for us and it was the opposite, so it isn't clear cut. They keep coming back and there isn't a lot of speed differential on the straight any more," he pointed out.
"They will be coming back in good form next year and even the second half of the season I have no doubt."
He also refused to rule out Ferrari who, despite winning three races last year, have struggled in 2016.
"I don’t think you can write Ferrari off, they have clearly had a tough time most recently. I think they switched off very early for 2017. Never underestimate a team with so much resources and so much passion," said Wolff. "The expectations for Ferrari are always very high - and living up to those expectations is a different matter," he added. "Probably after a strong 2015 season we see a setback for Ferrari this year, but I do believe that they are improving."
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