Toto Wolff is predicting Mercedes' battle with Ferrari and Red Bull will "intensify" now F1 2018 has reached the European leg of the season.
Lewis Hamilton arrives at this weekend's Spanish GP, which is exclusively live on Sky Sports F1, with a four-point lead at the top of the Drivers' Championship after victory last time out in Azerbaijan.
But Mercedes trail Ferrari by the same margin in the Constructors' Championship following the opening four races, with the Scuderia appearing to possess the all-round fastest car early in 2018.
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Red Bull have also been very strong in race trim and claimed victory in China, although they have also suffered two double retirements, and Wolff thinks the fight for supremacy will heat up as the teams bring larger upgrades to their cars.
"The first four races indicate very strongly that we will see the three-way battle continue and - if anything - intensify," the Mercedes team principal and CEO said.
"Barcelona holds mixed memories for us - a double DNF in 2016, but also a dramatic win for Lewis last year after passing [Sebastian] Vettel on track for the lead.
"We're hoping that this year's Spanish Grand Prix will be a good race for us, but we know that it will be tough."
The performance of Mercedes this weekend will be particularly intriguing given their relative struggles in the last three grands prix, having appeared dominant during pre-season testing in Barcelona.
"Barcelona will be interesting because in testing we were the quickest there so we have to see where our pace has gone and whether it is just circuit-specific," Wolff told Sky Sports F1 after the Azerbaijan GP.
The first race of the European season traditionally sees the development race kick into gear with all 10 teams set to bring their largest updates of the season so far after the opening four flyaway races.
And Wolff is intrigued to see how the 2018 pecking order will be affected by the latest additions to the cars.
"It's the first step of the development race that looks like it could run to the very end of the season," Wolff added.
"It will be interesting to see how much performance the teams can find with their upgrades and what impact those upgrades will have on the team ranking - both at the front and in the midfield."
Having dominated Qualifying in the first four seasons of the hybrid era, Mercedes appear to have lost their one-lap advantage over Ferrari in 2018.
The team's sole pole position of the season came in the opening Australian GP with Sebastian Vettel and Ferrari having gone on to claim three consecutive poles.
With overtaking more difficult at the Circuit de Catalunya than at the last three tracks, Wolff says an improvement on Saturday is crucial for the reigning world champions.
"Overtaking is difficult in Barcelona and even more so in Monte Carlo, making track position key for a good race result. So every team will work hard to get every last bit of performance out of the car in qualifying," Wolff said.