Exercise is a repitive activity intended to develop specific physical or mental ability. Exercise has a set pattern. It is usually discreet.
Yoga encompasses Exercise. It is much more. It is an art. The human body becomes a musical instrument or a paint brush, wherein aesthetic patterns are created in time and space. As Sri Sri Ravi Shankar has said, Yoga and Meditation reduce entropy.
Yoga is primarily a mental activity. Even though specific muscles are invoked, mental awareness is primary. Yoga is exercise for the mind and body as a holistic whole.