B737-800
Flight Crew Instrument; Flight Crew Air Transport Pilot (ATP); Flight Crew Multiengine
Aircraft Equipment Problem Critical; Deviation - Altitude Excursion From Assigned Altitude; Deviation / Discrepancy - Procedural Clearance; Inflight Event / Encounter Other / Unknown
Flight Crew FLC Overrode Automation; Flight Crew Overcame Equipment Problem
ATC Equipment / Nav Facility / Buildings; Aircraft; Human Factors
On the LOC approach to ZZZ we were on a 190 degree heading at 4000' in ALT Hold on an intercept the localizer clearance. Approach cleared us to turn right 240 cleared for the approach. The PF (Pilot Flying) selected LNAV once the turn was complete; set the MCP (Mode Control Panel) to field elevation; and selected VNAV; and pointed at the 000 MCP altitude. As PNF (Pilot Not Flying) confirmed LNAV and VNAV PATH and verbally confirmed 'the dirt' in the MCP. To our surprise; the aircraft; on autopilot and autothrottles; immediately started to descend. We were outside ZZZZZ with a crossing altitude of 3600'; and it appeared we would cross below it. Both pilot's VDI's (Vertical Deviation Indicator) showed the aircrafts projected flight path to be parallel to and well below the magenta correct glide path. The VSD (Vertical Situation Display) also showed us to be 800-1000' below the path. PF (Pilot Flying) disconnected AP (Auto Pilot) and AT's (Auto Throttle) and began to manually fly the aircraft up to the magenta correct glide path line on the VSD. With the field in sight we were comfortable doing this. Once established on the correct path the PF hand flew the aircraft to landing. As far as we could tell in the absence of intervention the automation would have flown the entire approach 800-1000' low.Investigate why the aircraft attempted; while in LNAV and VNAV path; to fly the ZZZ LOC approach well below the correct flight path.We have racked our brains and have been unable to figure out a mistake we made or why the aircraft did what it did.
B737-800 Captain reported observing the autopilot system directing the aircraft to fly well below proper glide path on approach.