Vienna-born Demel was the first non-Italian to head Fiat's car business but was ousted by Marchionne in 2005 when the two men clashed over a restructuring strategy for the crisis-hit Italian automaker.
Despite withdrawing Fiat's bid for Opel at the last minute on May 29, Marchionne would still like to add the German carmaker to his Fiat-Chrysler empire.
Demel is playing a key role in stopping him. On June 25, he was in Detroit with Magna co-CEO Siegfried Wolf ironing out sticking points over Magna's Opel offer with General Motors CEO Fritz Henderson and GM's lead negotiator Jim Smith.
Magna remains the front-runner for Opel even if GM is talking with other bidders.
Insiders say Demel will lead the new Opel with the current management team of GM Europe President Carl-Peter Forster and Opel Managing Director Hans Demant.
Magna has attracted criticism from some quarters because it does not have any experience running a volume carmaker. Building niche cars at its Magna Steyr unit in Austria is not enough, critics say.
Demel led Audi out of crisisActually, Demel knows a thing or two about running car companies. He steered Audi out of a crisis during his time as CEO of the Volkswagen premium brand between 1995 and 1997. VW then asked him to restructure its struggling Brazilian operations.
Demel's success there made him a candidate to succeed Ferdinand Piech as VW CEO in 2001 but Demel quit the carmaker for Magna Steyr when VW chose Bernd Pischetsrieder as Piech's successor.
Soon, Demel and Marchionne could be competing to win sales in Europe's highly competitive car market. At the moment, Opel is slightly ahead despite its uncertain future.
Opel and sister brand Vauxhall sold 451,843 cars in Europe in the first five months while Fiat brand's sales were 446,356 cars, ACEA numbers show.