Pep Guardiola said Manchester City must now fight to qualify for next season's Champions League after Kylian Mbappé's hat trick for Real Madrid sent the Premier League champions crashing out of the competition before the Round of 16.

The elimination at the hands of holders Madrid ensured that former Barcelona and Bayern Munich coach Guardiola would not reach the Round of 16 for the first time in his coaching career.

Mbappé's hat trick sealed a 3-1 second-leg win for Real, and 6-3 on aggregate, to book a clash against either Bayer Leverkusen or Atletico Madrid in the next round.

With City now out of the competition and 17 points behind Premier League leaders Liverpool, Guardiola said his team must now focus on securing a top-four finish in England to be in Europe's top club competition next season after admitting that Madrid deserved to end his team Champions League hopes.

"We couldn't defend well with the movement from Mbappé and it was more difficult," Guardiola said. "The best team won, they deserve it.

"We have always done a group stage in Champions League seasons -- finals, semifinals, but this season in all competitions we have not been good.

"I have the feeling we were better than Real in the previous three seasons, but this time they were better. They deserve it. What we have to do is accept it and move forward.

"We have 13 games in the Premier League to try and be here next season. Nothing is eternal.

"We have been unbelievable and we have to try. We cannot win the league and we have to be in the top four or top five to try to be here again."

City have faced Madrid four times in the Champions League knockout stages since 2020, winning two ties and losing two ties including this one. And Guardiola said that this defeat did not hurt as much as previous losses to Madrid because his side were unable to compete over the two legs.

"It's ok to accept the reality that they were better," Guardiola said. "In previous seasons when we were playing outstanding, it hurts more than today.

"I always ask of my teams that the team who deserves to win wins all the time but that doesn't happen in football.

"It's the reality, so we must reflect on the good things we have done. "We have time to think about it [the team's future]. Now it's easy to say, but it's not the point.

"Losing 2-3 at home was hard to swallow, but even with a good result, I know how good they are. With time, the team and club will accept what it is."

Next up for City is a high-profile Premier League matchup with leaders Liverpool on Sunday. The status of star striker Erling Haaland, who was unable to play against Madrid on Wednesday due to injury, is in doubt for that game.