Here's the story:
lllustrated Corvette Series No. 128- 1963 Z06 Corvette
"The Original Z06"

Corvette racers never had a better friend than Zora Arkus-Duntov. For the most part, Zora was good at sidestepping GM’s “we don’t race” edict. For those who knew what to look for, there were always plenty of “heavy-duty” and “off-road” options for Corvettes. As the new Sting Ray was being prepared for the ’63 launch, Duntov assembled the most advanced Corvette box racer to that date - the Z06.

By the late ‘50s, the solid-axle Corvettes had established themselves as competitive race cars. Underneath the all-new Sting Ray body was the real breakthrough: a four-wheel, independent suspension. The fuel-injected small-block engine had been opened up to 327-cid in ’62 and now packed 360-horsepower. The all-new suspension of the Sting Ray was essential to better use the extra power on the race track.

Racing packages have never been cheap. The Z06 package was the most expensive Corvette offered to that date. Costing $1,818, the Z06 option was very pricey. But there were other options that were mandatory for the Z06. Those options included the L84 Fuel-Injected 327, the close-ratio 4-speed transmission, and the positraction rear axle. These goodies added an extra $661, for a complete price of $2,479, on top of the $4,252 base price of the car. Then, with a few other extras, tax, tags, registration, etc,. buyers were looking at a $7,000 Corvette in 1963! You could buy a loaded ‘63 SS Impala for just over $3,000.

The hardware included in the Z06 package was amazing advanced for its time. With plenty of power on tap, most of the Z06 extras were designed to enhance the suspension and brakes - critical elements for racing. The front suspension had stiffer shocks, beefier springs, and a thicker, .94-inch stabilized bar. The rear suspension had a 7-leaf transverse spring - two more than the stock setup. To fit the larger 7.75 x 15 racing tires, the rear inner wheelwells were wider. The knock-off alloy wheels were an on, and off, and on again part of the Z06 package. Not all Z06 cars had the knockoff wheels. To reduce the number of pit stops, a 36.5-gallon fiberglass gas tank was included. Interestingly, this part of the Z06 would remain an option through to ’67.

But the real advancement could be found in the car’s race-designed braking system. Many of the older Corvette race cars had less than inadequate brakes. The system was completely new, from its vacuum-assisted, dual-circuit master cylinder to its finned brake drums. Each brake had a cooling fan built onto the hub, and the front units were further cooled by external air scoops. To complete the new cooling system, each drum featured five vent holes. The cerametallix brake pads were not for street use and almost useless until heated up. While the ’63 Z06 was theoretically streetable, it was noisy, hard-riding car away from the race track.
For a mass-produced sports car, this was an impressive package that should have propelled the new Sting Ray into the winner’s circle with considerable frequency. Unfortunately, there was another race machine being built at the time by a Texas chicken farmer/racer named Carroll Shelby. Shelby’s little Cobra had as much power as the Corvette and weighed 1,000 pounds less. But because they were both considered “production cars,” the Vette and the Cobra competed in the same class. Mickey Thompson raced one of the first six Z06 cars and won the L.A. Times Three Hour International in October, 1963. It was a default win, however, as the leading Shelby Cobra broke.

The Z06 package had no external markings, so it never developed the kind of performance mystique enjoyed by the L88. Until the arrival of the ’01 Z06, the ‘63 Z06 Vettes were mostly forgotten. But the Cobra problem aside, Z06 equipped Corvettes did rack up wins. The official Z06 production count was 199 units, making the Z06 one of the rarest Vettes ever offered.

Meanwhile, back in his private skunkworks, Duntov was working on a Cobra-killer. It was called the “Grand Sport.”