TOKYO, Oct 31 (Reuters) - Japan's Panasonic Holdings ( PCRFF )

said on Thursday second-quarter operating profit rose

42% at its battery-making energy unit, as stronger sales of

energy storage systems for data centres offset falling demand

for automotive batteries.

Operating income for the key segment, which makes batteries

for Tesla and other automakers, rose to 32.7 billion

yen ($213.82 million), despite a decline in profit from the

in-vehicle business.

The company retained its full-year operating profit forecast

for the unit at 109 billion yen, however.

Panasonic ( PCRFF ) said the unit was grappling with lower sales in

Japan and increased development costs for new customers, as well

as ramp-up costs for factories in Kansas and Japan's Wakayama

prefecture in the quarter.

Last month, Panasonic Energy said it had finalised

preparations for mass production of its 4680 batteries in

Wakayama to help automakers extend the driving range of EVs and

use fewer cells to achieve the same battery pack capacity.

The unit has sought growth in the North American market by

building a second U.S. plant in Kansas set to start production

in early 2025 and with another factory in Nevada that provides

batteries to Tesla.

It competes with other Asian battery makers such as China's

CATL and South Korea's LG Energy Solution

, which said on Monday it had a conservative view of

revenue growth next year amid slowing EV demand.

Panasonic ( PCRFF ) also maintained its full-year profit forecast for

its entire business at 380 billion yen.

($1=152.9300 yen)