The GTO was the brainchild of Pontiac engineer Russell Gee, an engine specialist; Bill Collins, a chassis engineer; and Pontiac chief engineer John DeLorean. In early 1963, General Motors' management issued an edict banning divisions from involvement in auto racing. This followed the 1957 voluntary ban on automobile racing that was instituted by the Automobile Manufacturers Association.[4] By the early 1960s, Pontiac's advertising and marketing approach was heavily based on performance, and racing was an important component of that strategy. With GM's ban on factory-sponsored racing, Pontiac's young, visionary management turned its attention to emphasizing street performance.
In his autobiography Glory Days, Pontiac chief marketing manager Jim Wangers, who worked for the division’s contract advertising and public relations agency, states that John DeLorean, Bill Collins' and Russ Gee were responsible for the GTO's creation. It involved transforming the upcoming redesigned Tempest (which was set to revert to a conventional front-engine, front transmission, rear-wheel drive configuration) into a "Super Tempest" with the larger 389 cu in (6.4 L) Pontiac V8 engine from the full-sized Pontiac Catalina and Bonneville in place of the standard 326 cu in (5.3 L) Tempest V8. By promoting the big-engine Tempest as a special high-performance model, they could appeal to the speed-minded youth market (which had also been recognized by Ford Motor Company's Lee Iacocca, who was at that time preparing the sporty Ford Mustang variant of the second generation Ford Falcon compact).
The GTO was basically a violation of GM policy limiting the A-body intermediate line to a maximum engine displacement of 330 cu in (5.4 L). Since the GTO was an option package for the Pontiac Tempest and not standard equipment, it could be considered to fall into a loophole in the policy. Pontiac general manager Elliot "Pete" Estes approved the new model, although sales manager Frank Bridge, who did not believe it would find a market, insisted on limiting initial production to 5,000 cars.
The GTO became a separate Pontiac model (model number 242) in 1966, instead of being an "option package" on the Tempest LeMans. Pontiac's intermediate line was restyled, gaining more curvaceous styling with kicked-up rear fender lines for a "Coke-bottle" look, and a slightly "tunneled" backlight. The tail light featured a rare louvered cover, only seen on the GTO. Overall length grew only fractionally, to 206.4 in (5,243 mm), still on a 115 in (2,921 mm) wheelbase, while width expanded to 74.4 in (1,890 mm). Rear track increased one inch (2.5 cm). Overall weight remained about the same. The GTO was available as a pillared coupe, a hardtop (without B-pillars), and a convertible. Also an automotive industry first, plastic front grilles replaced the pot metal and aluminum versions seen on earlier years. New Strato bucket seats were introduced with higher and thinner seat backs and contoured cushions for added comfort and adjustable headrests were introduced as a new option.[8] The instrument panel was redesigned and more integrated than in previous years with the ignition switch moved from the far left of the dash to the right of the steering wheel. Four pod instruments continued, and the GTO's dash was highlighted by walnut veneer trim.
Engine and carburetor choices remained the same as the previous year, except the Tri Power option was discontinued mid-model year. A new engine was offered that saw few takers: the XS option consisted of a factory Ram Air set up with a new 744 high lift cam. Approximately 35 factory installed Ram Air packages are believed to have been built, though 300 dealership installed Ram Air packages are estimated to have been ordered. On paper, the package was said to produce the same 360 hp (270 kW) as the non-Ram Air, Tri Power car.[citation needed]
Sales increased to 96,946, the highest production figure for all GTO years. Although Pontiac had strenuously promoted the GTO in advertising as the "GTO tiger," it had become known in the youth market as the "goat."
