I can't say I noticed better paint on the Audi (finish) when I was paying the S3 close scrutiny and contemplating a change of order around Nov (following the R's big GFV drop). My boss' boss' Sepang S5 is peppered with paint chips that would indicate it is no more resilient than VW paint (and it doesn't do many miles either). I really can't imagine Audi's paint being any better from a chemical composition point of view nor better applied.
The whole spraying and IR oven curing process is automated, I can't imagine Audi having better spray booths than VW, especially the flagship Wolfsburg plant which is bang up to date. The only way I can think of that VW could be suffering more orange peel is if the throughput is too fast in the paintshop, thick coats upon thick coats with insufficient drying. When I look at the finish of my GTD from an orange peel point of view, I think it's as good as anything else mainstream out there - have you seen the state of current/new Honda and BMWs for orange peel lately? For VW to be rushing the painting, the painting process would logically have to be the limiting step in building a VW (I wouldn't know if that is the case).
Due to the Aluminium doors being so light on their hinges, the S3 doors feel a bit cheap (it's weird how we perceive heaviness with quality - I have a titanium watch that I don't like the "feel" of when handling it off the wrist for similar reasons). Perception only (aluminum is good, and despite being lighter than the VW doors, a quick tap had them sounding a little thicker), but I have had no issues with hang or panel gaps on my GTD.
I don't think there are any pecking order/grades of workmanship from VW and Audi plants, they'd surely attempt to build them all to the same standards with same level of training to personnel. do we really expect Ingoldstadt Audi cars to be built better than Hungarian Audis, in turn better built than Wolfsburg VWs, in turn better built than Spanish VW Polos, in turn better built than Portuguese VW Scirocco/EOS etc?
There are some shared plants between VAG too, would a spanish built Audi Q3 have had more attention lavished on it than a Polo or Ibiza built at the same plant, or have been painted with a different process?
If you're looking to see something "premium" for the badge, you'll see it (and ignore/not look for something that the VW might be doing better).
The most impressive thing for me on the MK7 vs previous VWs I have owned is the consistently small and tidy panel gaps, very impressed bythe bodywork (except bumpers being a slightly different shade, but I see that on plenty of other marques, depending upon the colour - darker shades, especially metallics seem more opaque on the black bumper and less likely to suffer from this)
There are pennies between an R and an S3 (about £800/2.5%), and if Audi pays it's workforce more than VW pays theirs for a supposedly better job done, you'd expect less money to have gone into the actual car (materials) if costs between the 2 finished articles are pretty much the same.
The quality of the standard leather on the S3 didn't impress me any more than VW's nappa options either, although the dash looks a little more premium in a minimalist kind of way (with the flip up screen not deployed - looks a real afterthought eyesore when it is).
For me there was nowt between the 2 cars - a matter of slightly better materials used in the interior (softer lower dash/lower door card plastics and standard nappa leather) vs standard equipment separating the 2 beyond external looks.
Knowing your car and the slight niggles it may or may not have had at delivery (that slight door catch adjustment that needs doing) vs a cursory look at your neighbour's cars and not knowing if they've had some remedial tweaking after collection may not be a completely fair appraisal of VW build quality vs Audi build quality. With the exception of the plants that make the truly high end and low volume VAG cars (like the Phaeton in Dresden's "glass" factory), i'd expect QA/QC and building standards to be pretty uniform across all plants.
