Mercedes F1 Technical Chief Paddy Lowe says Lewis Hamilton's Hungarian Grand Prix win could be the start of a successful second half of the season.
Lowe joined the Brackley-based team from McLaren and believes that the team are making real progress in developing the car.
Lowe, 51, says understanding the Pirelli tyres has been key.
"There have been one or two problems which needed to be understood, particularly around race pace, but we're clearly making progress.
"We've tried things. The team is very strong and has done a great job to understand the problems and adapt with a moving target because the tyres have kept changing."
"Hopefully we'll have some stability now, and that is what is very promising for the races to come."
The second part of Ross Brawn's Q&A on the official Mercedes YouTube channel.
Mercedes team boss Ross Brawn is predicting a strong finish for the Brackley-based Formula One team.
Lewis Hamilton won the Hungarian Grand Prix from pole position in the last F1 race before the summer break.
Seven pole positions in the last eight grands prix and three wins in the last five have made Mercedes the main challengers to Milton Keynes-based Red Bull.
"The first half of this season can be split into two halves again - the first five races and the second five races," Brawn told the team's YouTube channel.
"I'm very pleased particularly with the second five races because we have started to pick up some momentum, pick up some strength."
Sebastian Vettel (Red Bull) has won the German Grand Prix. Kimi Raikkonen (Lotus) finished second with Romain Grosjean (Lotus) third
Mercedes and Pirelli have each been reprimanded over their involvement in a tyre test at Barcelona last month, the FIA has confirmed.
Mercedes have also been suspended from an upcoming young driver test.
Northamptonshire-based Mercedes must wait until tomorrow to hear whether they will be punished for their controversial tyre test.
The president of the FIA tribunal in Paris sat for more than six hours. It was brought to a halt at around 4:45pm local time.
Pirelli told the FiA Tribunal hearing the Mercedes tyre test case that the FIA had no jurisdiction over the tyre supplier.
Dominique Dumas, for the tyre firm, said:
"Pirelli is only exercising the rights which have been conferred upon it by the FIA. We are unable to understand the disciplinary process. Ferrari and Red Bull Racing have confirmed that they have no grievances against Pirelli.
"The claims are unfounded because it has been recognised that Pirelli has not violated the international sporting code.
"Pirelli has no FIA licence. It is a supplier amongst many other suppliers."
Mercedes Team Principal Ross Brawn has been giving evidence in defence of the Brackley-based F1 team.
Giving evidence Brawn called for "perspective" over the significance of the data gathered by his team during the Pirelli test.
Brawn, who previously revealed the final decision to agree to the Pirelli test was his alone, said access to telemetry data was an "inevitable consequence" of the work being done, but said Mercedes sought to keep their exposure to it "at a minimum".
He conceded the test in a 2013 car "could be perceived as an advantage", but said nothing was learned that had not already been established during the weekend of the Spanish Grand Prix.
"We didn't know what the tyres were and we didn't know what the detailed objectives were of what Pirelli were doing.
"We always work quite frankly on the principle that no information is better than bad information. So I don't see how we could have used any data that resulted from the Pirelli test."
Northamptonshire-based F1 team Mercedes have mounted a robust defence of their controversial tyre test.
The team's lawyer cited similar tests conducted by Pirelli with Lotus and Ferrari in recent years, in which the F1 teams also had access to car data.
Ferrari were initially asked to respond to an FIA request for information relating to today's hearing over the tyre test they conducted with Pirelli earlier this year but as they used a 2011 car and test driver Pedro de la Rosa they were not summoned to appear before the tribunal.
However, Paul Harris, for Mercedes, hinted at dissatisfaction at that decision by saying he did "not accept that [by] Ferrari running a 2011 car, that that car does not confirm substantially to the 2012 or 2013 regs".
He added: "The changes between 2011 and 2013 cars are minuscule."