Ford's China sales drop 26 percent in 2019

 Ford Motor Co.'s China sales fell for the third year in a row in 2019, dropping to less than half of what it sold at its zenith in 2016, and the company said the situation for the broader market is likely to get worse in 2020.

Ford sold 567,854 vehicles last year in China, down 26.1 percent from a year earlier, the company said in a statement Monday. While that was an improvement from 2018's 36.9 percent decline, the total number of vehicles sold was less than half of the 1.27 million figure reached in its peak year of 2016.

In the fourth quarter of 2019, Ford's sales dropped 14.7 percent.

The Dearborn, Mich.-based car maker said it expects China's auto market to keep shrinking in 2020.

It said it would improve its product lineup with "more customer-centric products and customer experiences to mitigate the external pressure and improve dealers' profitability," according to Anning Chen, who heads Ford's China business.

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China's market for automobiles grew for decades but over the past year-and-a-half, it has contracted due to an economic downturn that has dented consumer demand and tighter emissions standards that hurt auto makers and dealers.

The state-backed China Association of Automobile Manufacturers is set to release overall sales data for 2019 later Monday.

The auto slump has been especially tough for American brands. Ford and General Motors Co. have been among the hardest hit--along with local companies--while German and Japanese brands have grabbed more market share.

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For 2019, GM said sales dropped 15 percent from a year earlier, its most severe annual decline in China, which is its largest overseas market. American car makers lost 1.5 percentage points of market share from January through November, according to the China Association of Automobile Manufacturers.

Ford started struggling in China in 2017, earlier than when the broader downturn in the Chinese auto market began in July 2018.

The company's main problem is its outdated product lineup, said Yale Zhang, head of Shanghai-based consulting firm Automotive Foresight.

"For the past two or three years, they didn't launch new products quickly enough and the mainstream models hadn't been updated for years," he said.

For example, Ford hasn't updated its midsize Mondeo sedan--known as the Fusion in the U.S.--or about two years.

Mondeo's China sales for the first 11 months of 2019 fell 67 percent from a year earlier, according to the auto sales database of Sohu, a search engine.In addition, analysts have said, Ford's vehicles lack some features that appeal to Chinese buyers, including internet connectivity and large touch screens. Ford says plans to launch more than 30 new models in the next three years.

The company's China leadership has experienced significant turnover in recent years. Last year, Ford overhauled its management team under Mr. Chen--who was appointed in late 2018 as Ford's seventh China chief in 10 years--after he turned around Chery Automobile Co.

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Mr. Chen has installed more local designers and marketers with a better sense of Chinese tastes, the company has said.

Ford has pared losses in China, posting a $565 million loss for the first nine months of 2019, better than a loss of about $1 billion for the year-earlier period.

The company reports fourth-quarter and full-year 2019 results on Feb. 4. The car maker has been cutting costs, working to mend ties with its dealers and rolling out new models, including the Focus Active crossover sport-utility vehicle and an electric SUV, Ford executives said in October.

While Ford's pricing power in China has improved, those gains have been offset by continued sales declines, which were worse than the company expected in the third quarter, the executives said.

"We're clearly not satisfied with our standing in China and the team is working exhaustively to return to profitable growth in this important market," Ford Chief Executive Jim Hackett told analysts during a conference call in October.

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Last month, Ford said it expected its 2019 losses to be roughly half of the $1.5 billion lost in 2018, with an eye toward additional improvement in 2020.

Raffaele Huang in Beijing and Mike Colias in Detroit contributed to this article.

Write to Yoko Kubota at yoko.kubota@wsj.com

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