However, Lahm says City are a Champions League contender thanks to his former Bayern coach Pep Guardiola.
He explained, "Guardiola's teams recognise each other immediately, even if the television images were in black and white. You have to work very hard to achieve that superiority every day.
"In addition, he invents positions for exceptional footballers. He lets (Lionel) Messi reinterpret the position of centre-forward because he knows that great games are decided by great players. Creativity is the most important thing. His football is a celebration of individualities.
"To win the Champions League, however, you need luck in the draw and in the knockout rounds. At Barcelona, Guardiola had four or five players who would be in a world eleven. At Manchester City he doesn't have that, despite having invested a lot.
"By squad, Manchester City is not one of the favourites, especially since (Sergio) Agüero, their player with a special talent, is not in top form due to injuries."