Toto Wolff has said that there will be "consequences" following Mercedes's clear defeat in Montreal.

With a fresh engine spec, Ferrari's Sebastian Vettel dominated in Canada, therefore re-taking the championship lead by a single point.

"We came to Montreal thinking our car would be strong," Mercedes boss Wolff told ORF television.

"Now we are going home with the realisation that Ferrari had the better car. In qualifying and the race.

"We need to wake up now. Consequences are necessary, but they are discussed internally."

Team chairman Niki Lauda confirmed: "Ferrari had the better car, the better engine and the better fuel consumption. They overtook us in the areas we were ahead.

"Now something has to happen in every area.

"We were number 1 in fuel consumption, and now Ferrari and Renault can do better than us."

However, the F1 legend said that there is hope for Paul Ricard in two weeks.

"Then we'll get our new engine. That should help us," Lauda said.

World champion Lewis Hamilton, who lost his title lead in Montreal, commented: "Ferrari has the most consistent car. And Red Bull is equal to us now."

Mercedes remain 17 points ahead of Ferrari in the team rankings after the Montreal race.