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Red Bull's Christian Horner believes that Red Bull have 'halved the gap' to Mercedes, thanks mainly to improvements in Renault's engine.
The team won three races in 2014 but were unable to reach the top step of the podium in 2015, with the Renault power unit failing to provide competitive pace.
This season, however, Red Bull are once again taking the fight to the dominant Mercedes outfit, with drivers Daniel Ricciardo and Max Verstappen both in good form.
"The most significant area is on the engine, and credit where's credit's due," team principal Horner told Autosport.
"The guys (at Renault), with the restructuring they put into place at the back end of last year, the philosophy changes made, the developments brought in ... the engine has clearly made a step forward.
"We've probably halved the gap to Mercedes, and there seems to be a real direction.
"We've made progress on the chassis, and, of course, these things have to work in combination, but the biggest element I would say is the step forward in the engine."
Renault's next major upgrade is likely to be put on hold until the beginning of next season, when Horner expects to mount an even greater challenge to Mercedes.
"The engine we had this year was delivered absolutely on target to what was projected pre-season," he said.
"So, if they can do the same again, then hopefully we should really reduce that gap significantly to at least this year's Mercedes - and who knows what they have in the pipeline for next year - but it should be another good step."
Red Bull have one win to their name so far this season, triumphing through Verstappen at the Spanish Grand Prix in May.