They operated primarily on the Midland Line and the Greymouth-Hokitika portion of the Ross Branch These kinds of vehicles were known in some other countries by a variety of other names, including "railbuses" and "railmotors".

Branch lines in rural New Zealand were typically operated by mixed trains that carried both passengers and goods, and their schedules were usually slow due to the loading and unloading of freight that occurred during the journey.

Thus, NZR investigated railcars as an alternate means of providing an attractive passenger service without the expenditure and costs associated with a locomotive-hauled carriage train.

By 1936, no design had proven successful enough to warrant construction of a whole class, though an Edison battery-electric railcar built in 1926 had proved efficient and popular until it was destroyed by fire in 1934.

[1] Power was provided by a Leyland 8.6-litre (520 cu in) diesel engine that could produce up to 73 kW (98 hp) at 1,950 rpm and propel the railbus at speeds of up to 97 km/h (60 mph).

[5] A 320 km (200-mile) trial run of RM 20 was undertaken in the Wellington area on Saturday 25 July 1936 and included a climb up to Pukerua Bay on the 1 in 57 grade.

[8] Another trial run from Christchurch to Timaru on 31 July 1936 demonstrated that the railcars could cover a distance of 164 km (102 miles) in 2 hours 8 minutes at an average speed of 77 km/h (48 mph).

[15] While operating the afternoon Hokitika to Greymouth service on 18 January 1937, a Midland railcar was involved in a fatal accident when it jumped off the rails at a level crossing near Arahura.

The derailment was caused by loose stones on the track that were scattered by a herd of cattle that had recently crossed the line; the front wheels left the rails while the rear ones did not, and the railcar in this condition travelled for 2.5 chains (50 m) as the driver unsuccessfully sought to stabilise and stop it.

[3] The Wairarapa railcars that entered service five weeks after the Midlands were similar, in that they were also based on the principle of a bus, but were much larger, accommodating 49 passengers, and were designed specifically to operate over the steep Rimutaka Incline.