Always a bridesmaid…? For a long time that seemed to be Audi’s fate. Despite a steady stream of favorable reviews, the German maker was the routine runner-up in the luxury sweepstakes to European competitors BMW and Mercedes-Benz, as well as the highline Japanese powerhouse, Lexus. But lately, something has happened, and Audi is gathering the recognition it has long deserved. In Europe, it’s actually setting the pace in the luxury segment and, here in the States, it wrapped up 2010 with an all-time sales record.

Credit an array of new products, from the pint-sized A2 to the mid-market A4 and A6 sedans. The striking R8 sports car keeps getting better with every iteration, and the new R8 Spyder has even the most dedicated Ferraristas thinking twice about where to spend their money.

Then there’s the all-new A8, the Audi flagship. This is rarified air, the Ingollstadt offering going up against industry benchmarks like the BMW 7-Series, Mercedes S-Class and Lexus LS. If our week behind the wheel of the 2011 Audi is any indication, we expect plenty of top-line buyers to be making the switch.

Ever since the classic Audi 5000 of the mid-1980s, the Volkswagen subsidiary has championed cutting-edge design. The exterior of the new A8 is striking and bold—machismo balanced by a feline grace. There’s a subtle, coupe-like curve to the roofline complemented by the distinctive LED lamps that anchor each corner.

Audi meanwhile had a tough challenge, living up to its reputation for setting the bar to beat when it comes to interior design. The new sedan is a tactile treat, with occupants surrounded by perfect appointments of leather, wood and aluminum. The unusual gearshift lever is a paean to more traditional design than what you’ll find in the latest BMW and Mercedes flagships, but don’t let that fool you. The 2011 Audi A8 is a technical tour de force. To our pleasant satisfaction, that means a much more intuitive control system for operating everything from vehicle safety systems to the state-of-the-mobile-art infotainment package. Despite significant improvements in the oft criticized BMW iDrive and Mercedes COMAND systems, Audi is well ahead when it comes to simplifying the operation of a complex package.

For those who focus on traditional automotive values, Audi powers this premium package with a 4.2-liter DOHC V8. This direct-injection engine starts rolling out mountains of torque the moment your right foot touches the throttle, and despite its 4,400-pound heft, you’ll hit 60 in barely 5.5 seconds. Sad is the fact that few American motorists will ever experience the steady sweep of the accelerator as the A8 roars to its electronically limited top speed of 155 mph. Handling is surprisingly nimble, and while the new A8 is firmly planted it feels significantly lighter than you might expect.

At $78,050 for the short wheelbase model, $84,000 for the A8L, the new Audi flagship is a luxury relatively few will be able to afford. But if this is any indication of what Audi can accomplish it is all but certain to keep drawing new customers into the marque’s showrooms for the rest of the expanding lineup.