I don't see MB as a present design leader ...
Why?
Going neo-retro (with rectangular & boxy elements from the Sacco era) is hardly a leading & pioneering matter.
While the latest design study - the ODC - is full of "flame surfacing" which is also more a matter of following than leading.
The only interesting study is the F700, whose disadvantage is that it is not a design study per se, but a F-concept - displaying only some possible future design details, yet not the whole design.
Of course the MB is still very much a tech / innovation leader - although BMW & Audi are not lagging behind at all. Every brand is introducing innovations specific to brand values. Eg. I hardly believe BMW would first introduce a PRE-SCAN system which helps to enhance the ride comfort - since this is more MB's domain.
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Just like BMW Audi are also talking about "Zen-inspired design" recently although their designs are more & more expressive lately (wait to see A5 Sportback). Yet due to trying to increase better brand image & recognition they are still on the stage of unified design - something eg. BMW & MB had done in the past, and now they are already beyond that. Audi will evolve to the new stage soon, I guess.
It's interesting while BMW & Audi are talking about future trends are leaning towards "less design" aka "Zen-like design", MB are presenting vehicles with numerous strong design details - kind decorating the cars with as much strong (eg. boxy & rectangular, or "swollen" ) details lately. Kind a completely different pole from "Zen design". Kind a strange.
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BMW are still the design leaders: not that they invented something revolutionary (eg. clam shell boot lids, eyebrows, convex/concave shifts with sharp creases etc are not completely new design elements) but the Board of Management had guts to take the design risk - and to bring into production some design elements traditionally strange to BMW brand, and finally make BMW models more individual & different.
They started a trend - which make them design leaders. That's the definition of leader: starting a trend, and leading others to follow you.
Not necessary the leading designs are the best, or utterly beautiful - that's not the point when talking about leading - design leader is someone who starts a new trend, someone who stirs the conventions, someone who is "the talk of the town", someone who is followed. And this is what BMW currently BMW exactly is.
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Of course things can change pretty quickly - it depends how innovative the design & marketing teams are, and even more important: how brave & daring the Board of Management is (and the investors - who support the plans via Supervisory Board). Of course a company also has to have enormous resources available to be able to be leader.
Decision to be a leader involves a great risks - sometimes you succeed, sometimes you fail badly. Therefore the risks are not taken very often.
I hope BMW stay design leaders as long as possible - I guess in the recent past they earned an image of design leading brand + design culture within the company is ranking very high lately, so they have great foundation to remain design leaders in the future as well.
Although - from marketing & financial reasons - it's naive to expect design shifts & revolution to happen with every new generation (in 7 years). Amortization of eg. tooling etc takes some time to be accomplished. And after that ... if there is a will to take another risk - a new revolution & another design leadership can begin.
