If you haven’t been to India, go on YouTube and search for videos of traffic in Mumbai or Bangalore. You’ll see families of four negotiating the anarchy while balanced on a single scooter like a Cirque du Soleil act.

Those families represent the market that’s about to change the auto industry for good, thanks to a car from India’s Tata Motors that will go on the market this year. The Tata is said to look like an egg on wheels. It will seat five and run on a 33-horsepower engine (that’s barely more muscle than a commercial riding mower). It won’t have airbags or antilock brakes, and its body will offer all the collision protection of an empty beer can. It will cost about $2,500—100,000 rupees, an amount also known in India as one lakh. Hence the Tata’s nickname: the one-lakh car.

The one-lakh car will be the cheapest on the planet. The closest price-point rivals in developing countries cost at least twice as much. In the United States, of course, you can pay $2,500 just to get your transmission fixed. The real impact, though, may be the mayhem Tata inflicts on established automakers, much as People Express and its $19 airfares in the 1980s touched off decades of woes for the major airlines. (View other consumer products that have changed their markets.)

Tata, which in December was poised to buy Jaguar and Land Rover from Ford, doesn’t plan to sell its one-lakh car in the U.S. Yet Tata is remaking the business of cars for the 21st century. The Tata Group conglomerate, which sells everything from tea to cellular service, has pulled off what consultants call business-process innovation, a feat far more profound and systemic than plain old innovation. A hundred years ago, Henry Ford engineered a business-process innovation in the auto industry. His Model T wasn’t just a car; it spearheaded a new way of manufacturing (the assembly line) and targeted a whole new market for cars (America’s emerging middle class).

Today, Tata is gutting conventional practices to manufacture and distribute a car in a country where many roads are a series of potholes with a little surface mixed in. The infrastructure couldn’t possibly handle 18-wheel trucks hauling automobiles—so Tata will sell not cars but car kits, shipping them to dealerships where the Tatas will be snapped together. Beyond that, Tata is identifying an entirely new car market. It isn’t going after people who buy cars, but people who don’t. “The customer-value proposition is to get families off the two-wheeler,” says Mark Johnson, chairman of the research firm Innosight, who studied Tata Motors for a forthcoming book. (Johnson’s business partner Clay Christensen is on Tata Consulting’s board.)