But despite still appearing to have the fastest car, Mercedes non executive chairman Lauda says the team needs to react to the stronger challenges it has faced.
"The alarm bell is ringing that the competition is coming closer," said Lauda.
"But if the alarm bell rings in time you can do something.
"If you sit back, which we don't try to do, you miss out. So what we have to do is keep developing the car."
NOT HIDING ADVANTAGE
Fernando Alonso, who was the only non-Mercedes powered drivers to finish in the top seven in Austria, suggested after the race that the German car manufacturer has the pace to lap the entire field.
The Spaniard said: "They seem to use the maximum power on a few laps in the race and then they have so much advantage that they play a little bit.
"I closed with [Felipe] Massa at the end and then when I was close I think he pulled away. It was the same with [Lewis] Hamilton on the first lap.
"It is unbelievable the difference between the two cars. If they run with those settings they would lap everyone, but they cannot do it for the whole race."
Lauda sees things very differently though and insists that Mercedes is pushing as hard as it can to maintain its place at the front.
"We were fighting Williams [in Austria] and how far behind were they in the end? Six seconds or something.
"We were going flat out. We were not playing around at the front. They were fighting each other and the Williams was just six seconds away.
"Then look at Nico and Lewis. One would go quicker and then the other would respond, because they are fighting from beginning to end.
"They went full blast from start to finish, like all the other races. The other races we won by 49 seconds, but in Austria it was just six."
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