Hmmm... does the Audi R8 put it ahead of the two, or maybe just both above and below?
Audi's A3 makes tons more sense than either the A-class/B-class or the BMW 1-series, simply because it's an actual compact car... not a pseudo-compact built around what should be a sports coupe (the BMW 1-series) nor a micro-car/mini-van disguised as a Merc (the A and B... oh, I know they're luxurious, but WTF, man...).
Audi has no hang-ups about the non-exclusivity of transverse FWD, and the recent popularity of AWD means it's easy for them to offer both really cheap FWD headliners and some pretty good AWD cars on the same platform... while BMW and Merc are stuck with sort of expensive RWD headliners and even more expensive AWD options on higher trim models... but note, on BMW and Merc, AWD is a "safety" option, while on Audi, AWD is good enough for their top-of-the-line models.
Audi, in general, is still below Merc and BMW, but damn, their incessant ad campaigns, lobbying, and brainwashing of motorheads is starting to wear me down, too...
The R8 will probably help raise Audi's stock a bit, but I don't know whether it's a boost for the brand per se... neither the old BMW M1 nor the Mercedes SLR made people rush to the dealerships to buy up C-class and 3-series cars... Be honest, does anyone buy a Nissan Sentra just because the R390 exists?
BUT: the M3, M5, S4, S6, RS4 and RS6
do sell a lot of 3s, 5s, A4s and A6s... thanks to a more effective halo effect. Working man's cars that go hella fast? Yes, I want a car that looks just like it...
That's where the money's at.
The (admittedly great) RS4 probably means more for Audi's volume sales now and in the immediate future than the R8
ever will.
Still cool that they're making it, though.