United lost out in the Premier League title race to Roberto Mancini's side on the last day of last season but United remain the most successful side in England, winning 19 top-flight championships in all.
City again look strong this year and are the only unbeaten side in the Premier League but Ferguson's side hold a three-point advantage going into Sunday's local derby.
Fergie says he revels in overcoming challenges from other clubs and welcomes City's recent improvement.
"It's great," he said. "Challenges are what we're made of. I've been lucky that, in my time here, I've been involved with great competitions against teams like Liverpool, Arsenal, Chelsea and now City. There are no dull moments.
"Chelsea did something similar and we recognised it. That's the great thing about this club. We don't run from challenges."
The United boss added: "We move on and always try and improve. We should take great credit for that."