The Indian firm Tata says it is actively looking for new sites at which to build the world's cheapest car.
Work at Tata's plant in West Bengal state has been suspended since the end of August in a row over land acquired from local farmers.
On Thursday the chief minister of the southern state of Karnataka said he had offered Tata 1,000 acres of land to build the car, called the Nano.
The Nano is due to be launched in October, but that could be delayed.
Compensation
Tata's patience appears to be running out. Work at its factory at Singur stopped more than three weeks ago, because of protests at the plant.
Exclusive look at the Tata Nano
Even though they have now been suspended, the company's managing director, Ravi Kant, has held talks with the chief minister of Karnataka, who has offered the company land to build the car.
After the meeting, Mr Kant said the company was actively looking for alternatives to its plant in West Bengal.
Tata's comments come as attempts to resolve the land dispute at Singur have broken down.
Local farmers are demanding the return of almost 300 acres of land, handed to Tata by the state government of West Bengal.
The state government says this is not possible and has instead offered them increased compensation.
The news that Tata is now looking elsewhere will come as a setback to the communist-led government of West Bengal.
If the plant is moved, they fear that it will slow down industrialisation in what is one of India's poorest states.
Others, however, say this dispute is part of a wider problem between India's growing industry - which needs land - and its farmers who are unwilling to give it up.
It may be some time yet before the world's cheapest car is seen on India's busy roads.
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