This is a tale of two "Z"s really - Zakspeed and Zylmex (aka Zee Toys). Both companies actually started at around the same time in 1968.
Zakspeed was founded by Erich Zakowski. Zakowski was a mechanic and garage owner from Niederzissen, Germany, which just happened to be around the corner from the Nurburgring. So he started tuning Ford Escorts to enter races there.
In the late 1970s Zakspeed became the official Ford Team in the Deutsche Rennsport Meisterschaft - the precursor to today's DTM. In 1981, the Zakspeed Capri won the DRM Championship outright, beating the almighty Flatnose Porsche 935s at their own game.
Zakspeed later even entered F1 for five years, however they failed pretty miserably there - that was one bridge too far. Later they had their hands in various racing series, but apparently filed for bankruptcy in 2010.
Zylmex or ZeeToys was also founded around 1968 - no one seems to be too sure. And for a while they produced a wide range of toys, which were distributed under various names in the US and elsewhere. The company folded in 1996 and the dies and moulds were sold to another Hong Kong based company. I have seen some of the old castings being sold by Motormax until about 5 years ago or so - they certainly got a lot of use over the years.
For a detailed account of the models made by Zylmex, please click on this link. There's plenty of information there.