Sebastian Vettel's triumph at Sepang, in the German's second race for Ferrari after leaving Red Bull, ended a run of eight successive wins for Mercedes.
The victory was Ferrari's first since 2013 and dispelled fears that Mercedes were so far ahead they could win every race this year.
Mercedes motorsport head Toto Wolff said that Malaysia had been a "wake-up call" for his team after world champion Lewis Hamilton and Nico Rosberg had chalked up a comfortable one-two in the Australian season-opener.
"We've spent time analysing the weekend in Sepang to identify areas for improvement," Lowe said in a team preview of Sunday's race in Shanghai. "The most significant weakness was our tyre management during long runs."
Lowe said exceptionally high temperatures in Malaysia had helped Ferrari and worked against Mercedes but it was essential to have a car which performed at all circuits and in all conditions.
"So there is work to be done on that front," added the Briton.
"It is now clearer than ever that there is serious competition for this world championship, so we will continue to work flat out for performance gains. We have a range of new aerodynamic developments for Shanghai and are targeting an improved performance from Malaysia," he said.
China, with generally low temperatures, will be a different challenge but one that Mercedes have taken in their stride in the past.
Championship leader Hamilton won there last year while Rosberg took the first victory of his F1 career in China in 2012.
"There is always room for improvement and we've been working hard to analyse everything for the next race in China," said Hamilton.
"The circuit itself is a different challenge to Albert Park and Sepang -- but it's one I really enjoy and it suits my driving style quite well."
(Reporting by Alan Baldwin, editing by Ed Osmond)
Share
