Honda have acknowledged the need to rebuild their hapless 2017 power unit.
Amid rumours that works partner McLaren are considering dumping their Japanese partner, reports that say Honda are starting work on a major upgrade.
"The difference in power with our rivals is big," Honda's F1 chief Yusuke Hasegawa is quoted as saying by Spanish newspapers including El Mundo and El Pais.
"To improve we have to achieve more efficient combustion and change the hardware of the current power unit.
"We are working on it, but we will not be able to put it in the car for two months."
Hasegawa's news comes as an increasingly frustrated Fernando Alonso piles the pressure on, amid the threat of his expiring McLaren-Honda contract.
"The change of regulation is a golden opportunity to catch Mercedes, so we needed to be much better," he said in Melbourne.
"If last year we were fighting for Q3, this year anything but the top 5 or 6 is no reaction.
"Personally I am well prepared and I feel that I am very fast. I attack the corners but I lose 200 metres in a straight line which is very frustrating."
Yet Alonso was also highly critical of the media, accusing reporters of "trying to exaggerate the situation".
"It is very easy to say McLaren-Honda is going to be last, that both cars will retire on the first lap. All of this nonsense is increasing day after day," he said.
Alonso will begin tomorrow's Australian Grand Prix in 13th place on the grid, with teammate Stoffel Vandoorne in 18th.
