With a number of drivers having expressed concerns at the first pre-season test that the 2014 cars were too slow, Allison's comments will ease some of those worries.
He reckons that a combination of early focus on engine performance and reliability, plus a desire to leave aerodynamic development until nearer the start of the season, means car are nowhere near their full potential yet.
And he has revealed that teams are making rapid progress in producing more downforce, which will lift cornering speeds.
"Just look at the size of the rear wings - they are more or less Canada-type rear wings," said Allison.
"That is roughly where the downforce of the  car is. There is also not the blowing of the floor either.
"But new rules offer new opportunities, so the rate of finding downforce is quite steep.
"You never know when it is going to slacken off, but it is showing no signs of that at the moment."
A number of teams only ran with basic car configuration at Jerez, and are leaving their proper aerodynamic developments for later in the pre-season preparations.
MORE TO COME IN-SEASON
Jenson Button was one driver who was in no doubt that speeds will lift before the Australian Grand Prix, and would continue to improve over the course of the campaign.
"When we go to the first race everyone is going to be much faster," he said.
"And by the end of the year we might not be that far off, a couple of seconds."
Williams chief test and support engineer Rod Nelson said that teams would use the forthcoming Bahrain tests to focus on speed much more, although it may not be until the final run that true performance becomes clear.
"I've got about 300 things on my list to do, and I think we've knocked off about 50 so far," he explained.
"We've got a load of stuff to do. We've got a whole race distance to run, which isn't all about qualifying pace.
"We've got different tests we're looking at to look at tyre degradation versus first lap performance for example.
"We'll have a lot of the new aero components that we're expecting for Melbourne will come for the second Bahrain test."
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