The 70-year-old boss is expecting a very difficult test at Etihad Stadium on Sunday and warns his team they must improve defensively if they are to avoid defeatManchester United manager Sir Alex Ferguson believes that a victory over Manchester City on Sunday will go down as one of his "best-ever results".
Sir Alex's side go into the game at Etihad Stadium with a three-point lead over their local rivals, and could move six points clear with a win.
However, having shipped 21 goals already this term, including three in their last league outing away at Reading, the Scottish boss has warned that if his side want to take anything away from the game, they will need to tighten up defensively.
"If we win it will be one of our best-ever results," Ferguson told MUTV.
"They are a really good, powerful team with massive players. It won't be easy and if we defend like we did at Reading we'll be in trouble.
"The important thing for us is to take lessons from the mistakes we're making and do something about it. We need to find a solution."
Sir Alex also refused to rule Chelsea out of the title race, despite Rafael Benitez's men being 10 points behind United and without a win in the Premier League since October
He added: "At this time in the season you can't really say it's a two-horse race.
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"If you think back we were 12 points behind Chelsea at one point and when Arsenal beat us in the league in 1998 we were 11 points clear."
The 70-year-old is also hoping that forward Wayne Rooney will be firing on all cylinders going into the derby clash, after he was the only player to feature in both of the club's last two games, at Reading in the league and against CFR Cluj in the Champions League.
"Wayne has another 90 minutes under his belt and hopefully by Sunday he is in real top form," he added.
"He is approaching that now but Sunday will be a different kettle of fish altogether."