The German insists City are not yet at a level where they can match Europe's elite.
This is despite the fact that the Citizens have been in lethal form this season in both the Champions League and Premier League, the latter of which, barring the most epic collapse in English top-flight history, they should win.
According to many observers, the Citizens are currently one of the best teams in Europe.
Gundogan however disagrees.
"It is something that it is not in our heads," said Gundogan. "People like to see us at the same level as Barcelona, Real Madrid or Bayern Munich but we still feel we need to compete with these teams. We are not there yet.
"But we are in a very good way and if we have to play one day against them, we want to be ready."