The interior in 1er belong to the previous generation. Take a look at New 5/6/7 and X3. They are ahead Audi and mb.
Sorry but I can't agree with your opinion here, yes they have dramatically improved but with each comparison, the D4 A8 is better than the 7er, the C7 A7/6 is better than the 5er/ Only the new X3 is in my opinion on par with the Q5.
They still have some way to go before you statement is correct and I doubt either MB or Audi will sit idle to allow that to happen.