Toto Wolff is expecting a close battle at the front in 2019.
Last year, Mercedes was being strongly challenged by Ferrari until the Italian team suffered a mid-season slump.
But Wolff thinks Ferrari will be strong again in 2019.
"Ferrari has ramped up its game over the last years tremendously and I think our performance levels were pretty close to each other," said the Mercedes team boss.
"In the end we came up with a small advantage, but they have become a formidable competitor," Wolff added.
He is also expecting Red Bull to be strong in 2019, particularly as that team has switched its customer Renault engines for a highly anticipated works Honda partnership.
"Red Bull and Honda might be another team joining the party," said Wolff. "But with the new regulations it's up in the air if somebody else could be competitive too."
That additional team is most likely to be Renault, even if boss Cyril Abiteboul is not ready to declare the French team's precise targets for 2019.
"We will announce our target at the start of the season but you need to expect from us that we keep on progressing," he said.
A big part of that progress, Abiteboul admitted, is the signing of Daniel Ricciardo.
"We expect Daniel to play a key role in completing the construction of the team, just like he played a key role at Red Bull both on track but also off track.
"We also feel that we need someone to embody that charge," the Frenchman added.
