A relative newcomer which nonetheless has managed to set a new standard for luxury.
The Audi A8 is a relative newcomer to the arena of German luxury sedans. It got off to a bit of a slow start as well, lagging pretty noticeably behind the 7 Series and the S-Class for a while after it was introduced. But these days it is very much a full-fledged contender, and an impressive one at that. Of course, it's competing with more than just Mercedes and BMW these days, as new cars keep entering the niche, but the A8 continues to hold its own. The A8 first came about in 1994, and 1997 in the US.
It served as the replacement for the short-lived but nonetheless important V8 model. The V8 was first produced in 1988, during a period when Audi was trying to better define its brand. Things like the Sport Quattro's success in Group B rallying had been doing an excellent job of helping out Audi's motorsport image, but Audi is ultimately a luxury brand, and rally wins alone don't do much for that image. So the V8 was brought out as a flagship model to boost luxury credentials. It was the first Audi model to use a V8 engine, hence the name, and also the first to offer both an automatic transmission and Quattro all-wheel-drive on the same vehicle.
The V8 was successful as a luxury flagship, but Audi being Audi, it couldn't help itself and just had to race it too. So the V8 ended up with a fair number of DTM victories under its belt as well. The V8 had been so successful that Audi decided to stop building it after only a few years. That might sound counterintuitive, but Audi realized that it had clearly been onto something and wanted to carry the idea further. So the A8 was a ground-up project which had its own platform (rather than using a stretched version from another car) and could therefore become an even more effective flagship.
The car was built using the then-new Audi Space Frame technology which relied heavily on aluminum to keep weight down and thereby preserve the brand's sportiness even in a bigger car. This sportiness was further realized with the introduction of the S8 in 1996, a higher-performance model which achieved badass status thanks to an appearance in the also-badass movie "Ronin". Toward the end of the first generation of the car, in 2001, Audi introduced an A8 with a 6.0-liter W12 engine, which it shared with the Volkswagen Phaeton and the Bentley Continental.
But very few first-gen W12 A8 units were made, and the full-scale production of W12 A8s really started with the debut of the second generation in 2002. It is the W12 A8 which earned the car further badass points, thanks to the second and third "Transporter" films. This was an even more serious luxury vehicle, and one which, like the competition for BMW and Mercedes, really showed off its technology. The second generation also introduced a much more interesting S8. This had a 5.2-liter V10, derived from the V10 in the Lamborghini Gallardo, but bored and stroked and producing 444 horsepower.
A new generation debuted in 2009, and although this one is slightly bigger than previous A8 models, it is still very light for its size, and can boast best in class fuel economy. Diesel engines are offered, as well as a hybrid drivetrain, for further improvements to fuel economy. Not that a whole lot of A8 drivers seem overly concerned about fuel economy, and they can certainly afford the fuel. The A8 is not a cheap car, but neither are those with which it competes, and Audi probably would lose sales if the car was too cheap. But most importantly, even though Audi had to work in order to catch up with the competition, and harder still to fend off a host of newcomers, it has still managed to make one of the luxury car greats.