Sebastian Vettel described his Friday running as "positive" but is wary that Ferrari still needs to make progress as he prepares to tackle his home race in Germany this weekend.
Vettel finished third best during the second practice session at Hockenheim, with Mercedes pair Nico Rosberg and Lewis Hamilton leading the way.
"Overall the outcome of the two sessions has been positive, but we still need to improve our car overnight and do some steps forward," he said.
"I think the one-lap speed was ok, I haven't seen much from the long runs, I have spent most of the afternoon on Soft tyres and they were lasting quite long, so I think overall it was ok but we still have to improve.
"We have to work on the set up of the car, and bring it a bit better together, so that the car feels better for me on track and it suits my driving, then I can attack better and more."
Ferrari team-mate Kimi Raikkonen was sixth quickest in the sister SF16-H.
"On Friday, it's always difficult to have a clear idea of where you are, from tomorrow we'll understand more, but the session today was not too bad," he said.
"For sure there's some work to be done to improve, but more or less we are about there.
"Obviously we want to be in the front, so this evening we are going to focus on fixing some things and improve in certain areas, then I'm sure we'll be ok."