Lewis Hamilton feels Mercedes have shown progress after the Saudi Arabia Grand Prix but Toto Wolff is still determined to see the team challenge for victory.
The Briton finished fifth in the second race of the season, improving on his seventh-place position on the starting grid as Sergio Perez led a one-two Red Bull lockout.
Team-mate George Russell meanwhile provided the Silver Arrows with their first podium of the year, after he was elevated to third following a penalty against Aston Martin's Fernando Alonso.
After a build-up dominated by the topic of the seven-time world champion's future, Hamilton acknowledged he was satisfied to make some steps in the right direction, no matter how small.
"We got some great points for the team," he told Sky Sports. "George got third and he did amazing. I went forwards. I'm really grateful to have come from seventh to fifth.
"The strategy didn't really work out for me, the set-up was a little bit off. [There is] lots to work on but there are positives to take away from it.
"I could only match [Russell's] pace rather than be quicker this weekend, but I'll work hard to make sure we're in a better position next weekend."
After taking fifth and seventh at the season-opening Bahrain Grand Prix, Saudi Arabia represented an improvement for Mercedes as a whole.
But Wolff is keen to see the team back among the frontrunners on the grid, stating of their performance; "We want to race for wins soon. We are [the] first loser.
"The question is what is [our] benchmark. If you look at the Red Bulls, they are just so quick. I think we understand the car more and I am looking optimistic for the future.
"We are making big elephant steps at the moment. But it is going to be a long time till we can challenge Red Bull. It is a super fun journey to climb back."
Russell, who missed out on standing on the podium before he was retroactively awarded third, acknowledges their rivals remain far ahead of the pack, but believes Mercedes are closer than many think.
"You have to give credit to what Red Bull have done," he added. "The gap they have to the rest of the field is bigger than we have seen since perhaps Mercedes in 2014. It is a serious, serious gap.
"But we know we didn't make the right decisions over the winter and we can regain some of that performance quicker than you would do ordinarily. All is not lost. We'll focus on ourselves and get the fundamentals right."
Mercedes posted a better day than rivals Ferrari, who saw Charles Leclerc forced to take a 10-place grid penalty before the race for a power unit change.
The Monegasque driver finished seventh, one place behind team-mate Carlos Sainz Jr., leaving team principal Frederic Vasseur to mull over a below-par weekend.
"It's not a good result," he added. "We didn't have the pace, we have to be honest. We have positive points from the weekend.
"[But] we have to understand where the lack of performance is coming from. It is not coming from the management."
Lewis Hamilton warned not to expect instant results from Mercedes upgrade
Toto Wolff has warned Lewis Hamilton that Mercedes’ upgrade is unlikely to provide a swift end to his losing streak.
Hamilton and team-mate George Russell were given their first taste of the team’s revamped machine in Monaco.
Hamilton and Russell qualified sixth and eighth, before making up two and three places respectively in Sunday’s rain-hit race following an early call to move from slick to wet rubber.
Traditionally, the Monte Carlo layout has been among Mercedes’ worst tracks with this weekend’s race at the Circuit de Catalunya in Barcelona set to represent a truer reflection of the team’s outright speed.
But Wolff believes he did not see enough progress from their upgraded car to suggest they will immediately move ahead of Aston Martin and Ferrari in the pecking order, or challenge Max Verstappen’s Red Bull team who have won all six races this year.
“We need to be careful,” said team principal Wolff. “We will collect more data in Barcelona, but I don’t expect us to clear Ferrari and Aston Martin there either.
“It is about understanding what does this car do now and how do we set it up?
“We are good at grinding away. Last year, the package was terrible at the beginning of the season, and we won a race in Interlagos [at the penultimate round] so we will get there.”
Hamilton finished 39 seconds behind Verstappen on Sunday as the Dutchman claimed his fourth victory in six races to extend his championship lead to 39 points.
Red Bull have now won 15 of the last 16 grands prix, with Verstappen, who grazed the wall en route to taking the chequered flag in Monte Carlo, remaining on course to race to his third world title in as many years.
Asked if Verstappen’s dominance is proving to be a turn-off for the sport, Wolff replied: “When you win in Formula One it is a meritocracy.
“They have done a good job and the car is fast in all conditions and the driver is at the top of his game.
“We need to do a better job, catch up, find intelligent solutions and hope our development slope is steeper than theirs, and eventually fight again.
“Whether it is good for the show or not, a strong fight between 10 drivers, or at least two, is obviously much better for all of us, but we have to accept it and work to get back there.
“The best driver in the best car spending the same money wins the championship, and if you break the rules you should be heavily penalised, but only then, and you should not be penalised for simply doing a good job.”
Fernando Alonso: Aston Martin ‘will not give up’ in push for F1 triumph
Fernando Alonso has not given up hope of defying the odds and beating Max Verstappen to the Formula One world championship after he finished second at Sunday’s Monaco Grand Prix.
Alonso took the chequered flag 27.9 seconds behind Verstappen and has now secured five podiums in six races following his transfer from Alpine to Aston Martin.
The 41-year-old Spaniard will head to his home race at Barcelona’s Circuit de Catalunya next weekend 51 points adrift of Verstappen and a dozen behind Sergio Perez in the other Red Bull.
“The championship is long and we will not give up,” said Alonso after he finished runner-up for the first time in nine years.
“Red Bull and Max are dominating every race. The Red Bull is untouchable and even with great results, we are behind them. We are relying on weekends where they have issues.
“If Max has one or two of those, then we will be a little bit closer in the championship.
“This is motorsport and anything can happen. On true pace we are not there yet, but we won’t give up.”
Alonso kept Verstappen honest throughout Sunday’s race and was holding out on old rubber in the hope that rain would arrive.
But when it did, Alonso stopped for drys believing the track would not be wet enough for intermediate tyres.
However, the downpour continued and the Spaniard was forced to come back into the pits on the next lap, scuppering any chance of claiming his first victory in a decade.
“Maybe it was extra safe but in that minute-and-a-half it took to go through Turns five, six and eight again, the track changed completely,” added Alonso.
“The lap we stopped was completely dry but on my out-lap from the pits, it was wet.
“There was a huge margin behind me to do two stops and we thought it was the right thing to do. It was a complex race to read and execute.”
Christian Horner fears the Monaco Grand Prix will be “left behind” unless drastic changes are made to Formula One’s most famous track – as rain saved another procession in the principality on Sunday.
Red Bull’s Max Verstappen led every lap to win for a second time in Monte Carlo, extending his championship lead to 39 points after six rounds.
Aston Martin driver Fernando Alonso took second place, with Alpine’s Esteban Ocon third. Lewis Hamilton and George Russell finished fourth and fifth respectively for Mercedes.
Sergio Perez, Verstappen’s closest title challenger, endured a horror show. He started last and finished 16th after five pit stops, and multiple collisions with different competitors, and the walls that wind their way round the two-mile course.
For 51 laps, the race was a dud. Verstappen saw off Alonso on the short run to Sainte Devote and the major players followed round one by one.
The rain enlivened the predictable spectacle. Carlos Sainz slid off and kissed the wall at Mirabeau in his Ferrari, while Russell and Perez made contact after the Mercedes man rejoined the track following an error, also at the rain-soaked Mirabeau corner.
Lance Stroll hit the barriers twice and Haas’ calamitous decision to keep Kevin Magnussen on slick tyres backfired as the Dane crunched the wall at Rascasse.
But take away the sodden race track, and the top dozen were on course to take the chequered flag in the order they started.
And even with the downpour, Verstappen, Alonso and Ocon, who started first, second and third, finished first, second and third.
“It was an exceptionally boring race until the rain came down,” was Russell’s damning verdict.
Red Bull team principal Horner, fresh from celebrating his team’s sixth win from as many races, picked up the debate.
“It’s Monaco and it’s here for its history and its uniqueness,” he said. “But the problem is that the cars are so big now.
“All venues have to evolve a little and if there was just one area where you could create space for an overtake it would just give that chance, because so much weight is placed on qualifying. The race is won or lost on Saturday.
“I am sure that with the creativeness there is and the amount of land they are reclaiming here, there’s got to be the opportunity to introduce a bigger braking zone.
“Maybe make Turn 1 a little sharper or slower, or extend the circuit if there is the opportunity to add in another kilometre that included a hairpin – that would be phenomenal.
“It’s something to contemplate because when you think of the next 20 years of Monaco you don’t want to see it left behind.
“It earns its place on the calendar. It’s the jewel in the crown in many respects, but as the sport continues to move forward you can’t stand still, and Monaco needs to be part of that process.”
Despite being considered among the most glamorous events in world sport, the Monaco track has remain largely unchanged from the first grand prix staged in 1929, and some have claimed it is no longer fit for purpose in its current guise.
F1 bosses have looked at ways to adapt the tight and twisty layout, but have made little progress.
Verstappen kept his composure in the changeable conditions, and even survived a bump with the wall when the rain landed at Portier, to take his 39th win for Red Bull, surpassing Sebastian Vettel’s record of 38 victories for the grid’s all-conquering team.
“If you have a good car you can break these numbers,” said Verstappen.
“I never thought I would be in this position in my career. Growing up, I wanted to be a Formula One driver and I am now winning these races. It is amazing and better than I could have ever imagined.”
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