Showing control of the BPR series early in 1996, McLaren now saw that their car was lacking against the likes of the new Porsche 911 GT1 in the all new FIA GT Championship. At the same time, McLaren was aware of the arrival of the new Mercedes-Benz CLK GTR, Lotus Elise GT1, and Panoz Esperante GTR-1, all purpose-built racing cars that bore little relation to road legal cars like the McLaren F1. The new F1 GTR "Long Tail" cars were therefore developed, and with increased assistance from BMW Motorsport, McLaren continued into the 1997 season. Major teams included the BMW Motorsport-backed Schnitzer Motorsport, Team Davidoff, and Parabolica Motorsports. Privateers continued to campaign older 1995-spec and 1996-spec cars.
At the opening round, the new Mercedes showed its pace by taking the pole in qualifying, but the car suffered mechanically during the race. The newer F1 GTRs showed that they had overcome the performance advantage of Porsche by taking a 1-2-3 victory over six trailing 911 GT1s. However, for the next round, Mercedes-Benz would be able to put up a fight against the McLarens, with a new CLK-GTR losing to BMW Motorsports F1 GTR by less than a second. At Helsinki, with a smaller field on the temporary street course and more mechanical woes for Mercedes, the BMW Motorsport McLaren again took victory.
Unfortunately, Mercedes soon overcame their mechanical problems and took a 1-2 victory at the Nürburgring, ahead of five McLarens. McLaren was able to claw back a victory at Spa before the Mercedes again took over, taking 1-2 victories in the next three rounds. McLaren would take one final victory at Mugello before the Mercedes would take the final two victories of the year. BMW Motorsport, who had scored McLaren's only victories that year, managed second in the teams championships, while Team Davidoff took a distant third. Although McLaren had successfully outdone Porsche, they were simply unable to compete with the power of the new Mercedes-Benz.