"Mario has had an accident but he's fine," said a spokesman for the Premier League club. "There were no injuries sustained by anyone and it wasn't his fault".
He added that the 21-year-old would be fit to play in their clash at Arsenal on Sunday but did not know if Mancini had spoken to his fellow Italian following the incident.
A statement from Greater Manchester Police read: "Shortly after 3:15pm on Thursday 5 April 2012, police were called to Medlock Street, Manchester city centre to reports of a collision between two cars.
"The passenger of one of the cars was taken to hospital for precautionary measures. Inquiries are ongoing."
The car accident is Balotelli's second in less than two years and is the latest in a series of unfortunate incidents involving the Italian, who famously wore a T-shirt saying 'Why Always Me?' in October's 6-1 win at Manchester United.
He has been involved in a series of controversial incidents on and off the pitch including watching his city-centre flat catch fire after fireworks were let off in his bathroom.
Balotelli clashed with team-mate Aleksandar Kolarov over a free-kick in the home game with Sunderland on March 31 in which he scored twice in a 3-3 draw and British media reported that he was involved in a training ground bust up with Yaya Toure.
However, Mancini on Thursday called rumours of dressing room tension between Balotelli and other players "totally false" and went to great lengths to support his under-fire striker.
City's manager laughed when asked if he ever got tired of answering questions about his fellow Italian week after week.
"The Yaya Toure [accusation] is totally false, totally false," Mancini said. "What happened with Kolarov on the pitch these are situations that can happen at difficult moments.
"Every time Mario does something it's like a war. But there are other people on the pitch that do worse than Mario and no one says anything," he added of the unpredictable forward who has scored 13 league goals this season.
Mancini also said City's top scorer Sergio Aguero, who has netted 17 league goals, would be fit to face Arsenal while former Gunners midfielder Samir Nasri and central defender Joleon Lescott are also expected to return from injury.
Aguero has been suffering with boils caused by an allergic reaction to a spray used on an ankle injury while Nasri had a knee problem and Lescott has been nursing a groin strain.
Mancini refused to concede the title to rivals Manchester United, who lead the table by five points, although he said a defeat by third-placed Arsenal would all but end their chances.
"If we lose against Arsenal and they beat QPR - yes," he said looking towards United's game with strugglers Queens Park Rangers at Old Trafford in the early kick-off on Sunday.
"We should think positive for the next seven games. I think it may be more difficult but it is my opinion that this championship is not finished.
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