Toto Wolff conceded Mercedes must change their car design in order to return to the top of Formula One.
Mercedes endured a dismal 2022 season, with Lewis Hamilton suffering the first winless campaign of his F1 career.
Much of their struggles were put down to issues with the car, but Mercedes stuck with their unique "zero pod" design for the 2023 season, despite the success of Red Bull's "side pod" model.
Yet after a disappointing qualification session that saw George Russell place in sixth and Hamilton in seventh for Sunday's season-opening Bahrain Grand Prix, Wolff confirmed changes will have to be made.
He said: "I don't think this package is going to be competitive, eventually.
"We gave it our best go also over the [off-season] and now we just need to all regroup, sit down with the engineers who are totally not dogmatic about anything and decide what is the development direction we want to pursue in order to be competitive to win races.
"It's not only like last year that you're scoring podiums and eventually you get there.
"I'm sure we can win races this season but it's really the mid-and long-term that we need to look at which decisions you need to take."
Wolff believes Mercedes "gave it our best shot" but ultimately the team must accept their model has not worked.
"We hit our targets. That's why we gave it our best shot," he continued. "The moment comes and the stopwatch comes out and that showed us that it's simply not good enough.
"We haven't got enough downforce and we need to find solutions to fix that."
Two-time reigning world champion Max Verstappen claimed pole position in Saturday's qualification, with team-mate Sergio Perez completing a front-row lockout for Red Bull.
Ferrari duo Charles Leclerc and Carlos Sainz will start in third and fourth respectively, while Aston Martin's Fernando Alonso occupies fifth on the grid ahead of Russell and Hamilton.
Hamilton could 'take a holiday' after Sao Paulo disappointment
Lewis Hamilton says he "could happily go and take a holiday" instead of finishing the season after a dismal showing at the Sao Paulo Grand Prix.
He made early exits in both qualifying sessions and started the race at Interlagos from 15th on the grid.
However, unlike Max Verstappen, who impressively won the race having started in 17th, the Brit struggled to mount much of a fight, coming away from the weekend with just one point after finishing in 10th.
His performance was made to look worse as team-mate George Russell had been battling for the lead but narrowly missed out on a podium place as he finished fourth.
Hamilton only has three races left with Mercedes before his move to Ferrari next season, bringing an end to their 12-year partnership.
But he was left frustrated in Brazil, expressing his disappointment with the car.
"We were just slow," Hamilton told Sky Sports F1. "The car was really, really tough. I do really want to say still a big thank you to the guys in the garage. They turned up super early this morning and still did a great job throughout the weekend.
"The team could have won also, so at least one car was behaving a lot better.
"The car is like a plank of wood. It's like no suspension.
"It's bouncing on the tyres everywhere, and you can't get on the power anywhere. It's just the worst ride, I think the worst ride that we've definitely ever had, particularly through corners. It's just so stiff.
"But hopefully we won't have any more bumpy tracks. I think the last three aren't so bumpy. But yeah, I could happily go and take a holiday."
Norris claims Verstappen 'got lucky' in Brazil as title hopes fade
Lando Norris said Max Verstappen benefitted from a rule "no one agrees with" as he won a dramatic Sao Paulo Grand Prix to leave the McLaren's title hopes hanging by a thread.
Verstappen surged to a terrific victory from 17th on the grid in Brazil, with Norris faltering after starting on pole.
Norris and Mercedes' George Russell – who were vying for the lead – both pitted on lap 29, but that strategy backfired as the red flag was shown following a crash involving Franco Colapinto.
With the race suspended, Verstappen was also able to change tires for the restart, negating Norris' advantage from pitting as the world champion raced to a commanding victory.
Norris had cut Verstappen's drivers' championship lead to 44 points by winning Saturday's sprint race but now sits 62 points adrift with just three races of the season remaining.
The Brit refused to hit out at McLaren's strategy after the race, though, putting his struggles down to bad luck.
"I have faith in the team in what they are saying and they have trust in me," he told Sky Sports F1.
"It was just unlucky. I don't care about the hindsight side of things, that's luck for them, nothing more.
"They got lucky on a rule that no one agrees with. Probably they agreed with it today but every driver has disagreed with it in the past.
"Today it benefitted them, it could have benefitted us if we just stayed out, but that's a stupid thing to think of.
"Just a bit unlucky today, nothing more. Of course, disappointing. Max drove well. He got a bit lucky but that's life."
Verstappen 'wanted to destroy' Red Bull garage before Sao Paulo triumph
Max Verstappen revealed he wanted to destroy the Red Bull garage in the hours before he delivered a wet-weather performance for the ages to win the Brazilian Grand Prix.
Verstappen had been left frustrated after Sunday's delayed qualifying session, when a crash by Lance Stroll and subsequent red flag saw him drop out of Q2.
The Dutchman's early exit saw him finish 12th, but a five-place grid penalty for an engine change dropped him to 17th, presenting an opportunity for Lando Norris to take a seismic chunk out of his drivers' championship lead.
But a determined Verstappen then overcame the rain-affected conditions at Interlagos, climbing to P11 on the very first lap before making his charge into the top 10.
His remarkable comeback, which included five consecutive fastest laps, culminated in him passing Alpine’s Esteban Ocon for the lead on lap 43 before romping to victory.
“My emotions were all over the place, from wanting to destroy the garage (after qualifying) to winning the race,” said Verstappen. “It has been a roller coaster.
“It is unbelievable to win here from so far back on the grid. I was expecting to lose points in the championship.
"Now, I just want clean races. But I am not thinking about clinching the title in Vegas.”
A rain-affected race saw several incidents, with Lance Stroll, Alex Albon, Nico Hulkenberg, Franco Colapinto and Carlos Sainz all failing to finish the race.
But Verstappen remained calm in those conditions, snapping his 10-race winless streak, while also becoming the first driver since Kimi Raikkonen at the Japanese Grand Prix in 2005 to emerge victorious after gaining 16 positions.
And the three-time world champion believed his latest win, which was his 62nd in the competition, was his best one to date.
“The rain came, we stayed out, which was very sketchy, and I had to just keep the car on track,” continued Verstappen.
“It was undriveable in the conditions. I felt like I was driving a boat, or a jet-ski.
“There was a lot at stake because I had to be aware of the championship, so for me this is the best one (victory).
"And it is a massive boost for the team because it has been a tough period.”
Verstappen is now 62 points clear of Norris in the drivers' championship with just 86 points remaining, and can win a fourth consecutive drivers' title at the Las Vegas Grand Prix.
However, he insisted that the season was far from over, acknowledging he must remain perfect in the final three races to get over the line after an up and down season.
“Now it’s of course a great result, which if you look a few hours ago, was definitely the other way around, looking like we were going to lose a lot of points," he said.
“So I’m very happy, but still three tough races [to go], so we just need to stay calm and make no mistakes.
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