Sebastian Vettel put his Hungarian Grand Prix qualifying defeat down to an "exceptional" performance by Lewis Hamilton.
Vettel's Red Bull was 0.8 second clear of the pack after the first flying laps of Q3. But Mercedes driver Hamilton fought back in the final shootout and defeated Vettel by 0.038sec.
With the second Mercedes of Nico Rosberg 0.332s slower in fourth, Vettel said it was clear that Hamilton had produced a sensational lap.
"At the end of the day I was pretty happy with my lap but it was just not quick enough," Vettel admitted. "Obviously, Mercedes have a very strong pace in qualifying. I think Lewis did an exceptional job today if you look at the gap to Nico.
"You have to be fair and respect that. I'm not arguing with that."
Vettel felt there was little wrong with his own qualifying runs.
"There wasn't much missing. I was pretty happy with both laps," he said. "Maybe on the second try I was losing out a little bit in the middle sector. It's very twisty and there's a lot of corners in a short amount of time, and maybe I wasn't aggressive enough there. But it's stupid now to sit here and say maybe we should've done this or that."
The world champion does not think starting behind the Mercedes will compromise his race chances too heavily.
"Surely I would love to be a little bit faster and on pole, but it still puts us in a great place for tomorrow," said Vettel. "We have a good car and good pace for the race."