TOKYO (Reuters) - Panasonic Corp shares plunged on Tuesday as investors reacted to a sharp downward revision of the electronics maker's profit forecast, brought about by heavy spending to build its automotive battery business.

Panasonic is reinventing itself as a provider of auto parts, batteries and energy-saving home systems to escape the price competition of smartphones and lower-margin consumer products.

But its profit revision shows the company is far from harvesting from what it considers its next profit drivers, analysts said. Upfront investment in a battery plant is likely to cause Panasonic's battery division to log an operating loss in the current business year, the company said on Monday.

"Disappointment for Panasonic specifically is that their growth rate is not strong enough to offset headwinds from the strong yen," said Macquarie analyst Damian Thong.

"Panasonic needs to show that it can secure growth outside Japan across a wider range of its products, including offerings like solar panels, housing systems and high-end appliances."

Panasonic shares were untraded briefly during the trading session due to a glut of sell orders before slumping as much as 8 percent. In contrast, the broader TOPIX stock price index was almost flat.

The Japanese firm on Monday lowered its operating profit forecast for the full year ending March 31 to 245 billion yen ($2.34 billion). That compared with its previous projection of 310 billion yen and an average estimate of 297.30 billion yen drawn from 16 analysts.

The company cited a strengthening yen as well as upfront investment in a battery factory for U.S. electric vehicle maker Tesla Motors Inc.

(Reporting by Junko Fujita and Makiko Yamazaki; Editing by Christopher Cushing)