Mercedes is still the one pushing the envelope. If someone made up a list of automotive firsts, Mercedes-Benz would probably have about 90% of the top inovations.

As for quality, J.D. Powers has several rankings beginning with 90 days and moving on to 4-5 years. I don't care about the 90 day ranking because it doesn't mean much to me. the 1-3 year rankings are important because design defects show up here (like BMW's problem with their V8's). The 4-5 year rankings are the ones that are really meaningful. These are the rankings that indicate just what kind of lifespan a car will have. It's here that Mercedes usually excels.

Lexus (Toyota) are brilliant in that they let the Germans do the R&D on new inovations and then use a conservative approach in implementing them. There is little if anything in a Lexus that was a Toyota invention.