Ferguson: Chelsea will challenge under Carlo

Chelsea, who finished seven points adrift of United last season, appointed Italian Ancelotti in June after temporary coach Guus Hiddink left Stamford Bridge to concentrate on his role in charge of the Russian national team.

United manager Ferguson will get his first chance to assess Chelsea's credentials when the two sides meet on Sunday in the Community Shield at Wembley - the traditional curtain raiser to the season.

"Chelsea will be strong," Ferguson told reporters on Friday.

"Although Carlo has his own system of playing, which he used at AC Milan for years, with a diamond in the middle, Chelsea have a lot of experience and a lot of terrific players.

"Keeping John Terry will make them stronger, no doubt about that. He's experienced, he's England's captain and he's a good centre half," Ferguson said in reference to Chelsea's decision to reject a bid for the player from Manchester City.

United have been overshadowed by their Manchester neighbours in the close-season transfer market after big-spending City signed Carlos Tevez from the champions, fellow strikers Roque Santa Cruz and Emmanuel Adebayor, defender Kolo Toure and midfielder Gareth Barry.

However, Ferguson still expects United's main rivals for the title to be Chelsea, Liverpool and Arsenal.

"I think ourselves, Liverpool, Chelsea and Arsenal are looking at what is happening at Manchester City with great interest," added Ferguson.

"We're all looking to see whether it will work or not after the money they have spent.

"It's difficult to break into the top four with the consistency and quality that the top four have got.

"Don't forget that over the last few years those teams have competed in semi-finals and finals of the European Cup."