Many rural branch lines at the time ran "mixed" trains that carried both passengers and freight and were not particularly popular due to the slow schedule that resulted from loading and unloading goods during the journey.

NZR saw the use of railcars as a potential means of providing cheap and efficient rural passenger travel, and as railcar technology was not very well developed at the time, engineers experimented with new ideas and various styles.

The railcar was essentially a regular passenger carriage with a driving cab installed at one end; a Leyland petrol engine with an output of 60-75 kW was positioned in a front housing that extended some four metres in front of the cab.

The wheel arrangement was A-2, with the leading single axle under the cab and the bogie located at the rear end.

After construction, the railcar was put into trials to see whether it was suitable for use on regular passenger trains.