In the wake of financial losses and job reductions at Mazda North American Operations, Mazda’s top U.S. executive Jim O’Sullivan remains optimistic about one thing: Mexico. Mazda broke ground on its new plant in Salamanca last year, and the plant is set to produce Mazda3s and Mazda2s in early 2014. 

According to O’Sullivan, Mazda considered plant sites in the U.S. before deciding on Mexico. Mexico, which has fair trade agreements with 44 countries, was an easy choice. O’Sullivan pointed out that “the only country in the world with more trade agreements than Mexico is Israel.” Although current U.S. volume does not warrant a factory in Mexico, the new plant’s location will enable Mazda to ship cars both north and south.

Other automakers are also making moves toward Mexico. Audi has announced plans to build a plant in Mexico, and sources say that BMW has decided to build its 3-series there. O’Sullivan says that Germans’ decision to build luxury vehicles in the country is a ringing endorsement of the quality that Mexican workers can achieve.