The USD 800 million plant in Celaya, in the central state of Guanajuato, will produce 200,000 units per year, including the Honda Fit hatchback and a new compact sport-utility vehicle, mostly for export to the United States.
Mexican President Enrique Pena Nieto was on hand to unveil the sprawling factory alongside state officials and Honda chief executive Takanobu Ito.
"I am pleased to be here for the inauguration of this Honda factory, which recognizes that we are creating the optimal conditions to attract investments and to generate economic growth in our country," Pena Nieto said.
A combination of low wages, proximity to the United States and free trade deals with a raft of nations have turned Mexico into an investment destination for manufacturing companies, especially in the auto sector.
Mexico is the world's eighth-biggest car maker and the number four exporter after Germany, South Korea and Japan, according to industry figures.
Honda opened its first factory in the western state of Jalisco in the 1980s to produce motorcycles and later cars.
US, European and Asian auto-makers are flocking to Mexico.
The second Honda plant is near a Mazda factory that began operations last month.


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