The German ended Ferrari's victory drought by beating Mercedes rival Lewis Hamilton, who had started from pole position, in the Melbourne opener.
It was Ferrari's first win since the 2015 Singapore GP, and ratified its strong pre-season testing form.
But Vettel reckons Ferrari will still have to work very hard to keep up with Mercedes through the season.
Chinese Grand Prix
China extends race deal for three more years, says F1
29/09/2017 AT 08:00

Ferrari driver Sebastian Vettel of Germany (R) sprays champagne alongside second-placed Mercedes driver Lewis Hamilton of Britain

Image credit: Reuters

"I think Mercedes has to be the favourite," said Vettel in a press conference ahead of the Chinese Grand Prix.
"We had a strong first race but we really go race by race.
"We know we have a good package which puts us in a good place, but we know there are a lot of things we need to do to keep up with them and keep up with the position we are in now to fight for good races.
"The victory is the best medicine for everyone, it is good we did that and we move on."

Sebastian Vettel (Ferrari) - GP of Australia 2017

Image credit: AFP

Hamilton believes there is very little to choose between Mercedes and Ferrari.
"At the end of the day they won the race and did a better job, so we've just got to do a better job," he said.
"But I think it is very close. Pace-wise in qualifying it's very close, in the race he was able to keep up with me.
"There are going to be races where that fluctuates, where perhaps they're ahead and we're behind or we're ahead and they're behind."

Sebastian Vettel (li.) und Lewis Hamilton (re.)

Image credit: AFP

While unwilling to take too much comfort from the Melbourne result, Vettel said the difference inside Ferrari compared to 2016 was tangible.
"After one race it's easy to say this year is better than last year, but it is only one race," he said.
"The team has evolved, we are generally in a better position, people are more comfortable.
"We are more confident in the way we work now and hopefully we can keep up the trend to show it on track."
The four-time F1 champion also argued the Melbourne result might not be an accurate form guide for Shanghai this weekend.

Vettel beats Hamilton into second for opening win in Australia

Image credit: AFP

"It is completely different," he said. "The weather is completely different looking outside now. It is always a grand prix full of surprises.
"In 2007, my first race here, I started 17th in the Toro Rosso and finished fourth.
"We had the rain helping us at that time. You never know what happens around here.
"It is a demanding track for tyres and cars in particular and also drivers - so it's difficult to predict anything."
Chinese Grand Prix
Chinese Grand Prix secures new F1 deal
29/09/2017 AT 04:17
Chinese Grand Prix
F1 in new push to boost Chinese interest
05/07/2017 AT 08:26