They’re cute, but not cuddly. They’re thin, but not fleet of foot. It boasts 4 instead of 2. Give up? I’m talking about the world’s cheapest automobile. Made in India and designed for the Indian way of life, the Tata (NYSE TTM) Nano is cute, lightweight, and having four wheels rather than the two its closest competitor, the motorcycle, has.

The Nano is designed to become the post-Volkswagen “peoples” car. What makes this car interesting is its price: approximately $2,000. You read right, $2,000.(air conditioning extra)

Up until now, the chosen mode of transportation for millions of Indians has been either the motor scooter or the motorcycle. The automobile was reserved for those wealthier than the common folk. For those of us here in the U.S., the Tata rekindles memories of the huge failure we knew as the Yugo. This seems to matter not to the Indians. The Tata is supported by a dealer network of 470. It has behind it one of the largest manufacturers in all of India. And perhaps more importantly many Indians can now been seen in an automobile rather than a scooter.

This rear engine, four passenger city car has a ready made market. And if the world hadn’t been hit by the current recession, Tata dealers probably wouldn’t be able to keep them on the showroom floor.

Is there a lesson to be learned from Detroit in the Tata Nano story? No one disputes that the Nano is innovative on multiple levels—from its engineering, to its marketing, to its manufacturing. So, it’s hard to avoid the question: What can a humbled Detroit learn from the Tata Nano?

Is this one of those “If we build it they will come” stories, or is it simply a flash in the pan? Either way, there are 5 lessons that I think we can learn from Tata.

Lesson one: “Great companies are built on creating new markets, not increasing market share in existing ones,” says Vijay Govindarajan, a professor at Tuck School of Business at Dartmouth College.

Lesson two: Meeting the needs of your customer.  Imagine a U.S. automaker actually building what the public wants, rather than continuing incremental improvements to vehicles that aren’t selling.

Lesson three: Targeting a specific customer base. This is what Volkswagen did with its popular Beetle as well as the focus of automobiles on the other end of the spectrum Rolls Royce and Bentley.

Lesson four: Rethinking the supply chain. Automobiles are a composite product, made from parts supplied by companies A, B, and C. Establishing partnerships with a limited number of suppliers and then including them in the design and manufacturing process has enormous value in problem solving.

Lesson five: Streamline the manufacturing process, set a goal, and build a product around meeting that goal, rather than building the product and adapting the process to the product.

It is doubtful that the U.S. would ever become a major Tata customer, but it may serve as a model for the future of U.S. car making.