Although the seven-time world champion believes his team will be a long way behind Red-Bull-Renault in the constructors championship.
Michael Schumacher and Mercedes improved and looking for podium finishes
MELBOURNE // Michael Schumacher, the seven-time world champion, believes Mercedes has made "huge" progress with its car and is ready to challenge for podiums but has written off the team's championship hopes three days before the season-opening Australian Grand Prix.
"Mercedes has done a huge step forward with this year's car, it's a very performance-orientated car and it has paid out," said Schumacher, who lapped fastest in the final preseason test in Barcelona after the car initially seemed sluggish and plagued with reliability problems.
"I think this year our target and our realistic possibility is to fight for podiums and if things go very well, maybe to win a race," the German said in Melbourne.
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"Does this put us in a position to fight the championship? No ... If it comes, and the opportunity will be there, sure we will try to catch it.
"I think we have to see it step by step, where have we been last year, where can we be this year, and play it realistically, not unrealistically."
Schumacher made his comeback with Mercedes last season after three years in retirement following 11 years at Ferrari, but ended last year without a single podium finish.
The 42-year-old said he felt Mercedes would be among a pack shooting for second place behind Red Bull, who, sparked by the title-holder Sebastian Vettel, won the constructors' championship.
"I think we've got to play an important role just behind [Red Bull-Renault] ... Ferrari, Renault-Lotus, Williams looked good, McLaren's not to be forgotten, I expect them to be stronger than testing," said Schumacher, who will bid for his fifth victory on the streets of Albert Park.
"I see a good opportunity that we might be able to fight for that position, to be the second fastest."
"This weekend it's up to us to prove it and I think we have a good opportunity to ... Nevertheless, we should not overestimate the things and see the truth and that is that Red Bull is most likely the team to be beaten."
Schumacher finished ninth overall last year, his lowest since he finished 12th in 1991 on the back of six races with Jordan and Benetton, and was largely eclipsed by his younger teammate and compatriot Nico Rosberg, who finished seventh but with almost double the points.
Schumacher, one of five champions on the starting grid this year, said regardless of Rosberg, his goals of clinching another world title had not changed, even if it were not to happen this year.
"I think Nico proved [himself] last year, I think there's no doubt about this. It's going to be very tough for me. I'm still very confident I can match him," he said.
"The most important thing is to fight for the championship at the time that we're ready for it.
"To have a podium yes, would be great, but does it really change anything, no ... Are we ready right now? No. Can we win a race? Maybe.
"Would it satisfy me? Absolutely it would satisfy me! I would be thrilled about this, no doubt. It's all about winning at the end of the day."