The Blues face the five-time winners at the Allianz Arena on Wednesday in one of the most enthralling fixtures of this season's group stage.
Despite a 3-2 win for City away to Bayern in last season's competition, Kompany insists that tomorrow night's encounter remains too close to call.
"Its difficult to predict what will happen tomorrow, but as we move on we will get stronger," the Belgian international told reporters.
"We are not favourites, but the beauty of this game is that every year is a chance to start again. We've seen how much damage it can do when you don't finish top of the group. We believe in our abilities."
City head into their match against Bayern on the back of a 2-2 draw with Arsenal in the Premier League.