DETROIT– Honda Motor Co. said Friday it will build a second assembly plant in Mexico to make subcompact cars, following an industry trend to develop a low-cost export base in the region.

The company didn't name the vehicle that would be built at the new $800 million plant, but the only subcompact the company sells in the U.S. and Canada is the Fit, which is now built in Japan. Honda executives had said they were considering shifting production out of Japan because the strength of the yen makes it difficult to make money on...