German international Gundogan, whose side have only lost three games in all competitions this term, told Sky Sports News that being placed among Real Madrid and Bayern Munich as the continent's best teams is not in the players' heads.
"It is something that it is not in our heads," the 27-year-old said. "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.
"It doesn't matter how the first leg was, even with that result. The Champions League is a big stage for us and of course we want to win it. We want to play in a really serious way and we want to play our way."
City are 18 points clear at the top of the Premier League table with nine games remaining.